Willbros Reports Second Quarter 2012 Results from Continuing Operations

HOUSTON, Aug. 7, 2012 /PRNewswire/ -- Willbros Group, Inc. (NYSE: WG) announced today results from continuing operations for the second quarter of 2012. The Company recorded a net loss of $4.0 million, or ($0.08) per share, on revenue of $499.2 million, compared to a net loss from continuing operations in the first quarter of 2012 of $23.0 million, or ($0.48) per share, on revenue of $419.1 million, and net income from continuing operations of $7.2 million, or $0.15 per share, on revenue of $442.7 million in the second quarter of 2011.

For the second quarter of 2012, the Company generated operating income of $5.9 million compared to an operating loss of $10.6 million in the first quarter of 2012 and an operating income of $8.2 million in the second quarter of 2011.

Randy Harl, President and Chief Executive Officer, commented, "Our second quarter results were negatively impacted by delays on two projects and execution problems on two others. One project encountered dense rock formations, which led to underperformance by a sub-contractor and impacted productivity on the entire project. A lump-sum capital project in Canada also encountered poor soil conditions which reduced productivity and increased costs. In the aggregate, these four projects reduced our operating income by approximately $14.4 million in the second quarter of 2012, and were the primary reason we did not meet the operating income guidance of $14.0 to $16.0 million we provided with our first quarter results. Excluding the impact of these four projects, we would have exceeded the high end of this guidance.

"Despite the operating income shortfall relative to the guidance, we had several business units that performed as planned, or better than expected. I am very pleased with the progress we achieved in the Utility T&D segment which was driven by better performance in our transmission and distribution businesses in Texas. Our Texas distribution business, where we have been focused on making operating improvements, generated positive operating income for the first time since the acquisition of InfrastruX. Additionally, our Downstream Engineering business unit made a positive contribution for the second consecutive quarter and our Upstream Engineering unit continues to deliver strong operating performance on both engineering and EPC projects.

"We booked over $550 million of new work during the second quarter, maintaining a positive book-to-bill ratio. We continue to experience higher levels of bid activity consistent with our exposure to the Canadian oil sands, where we added $110 million in new work, primarily on sites where we have a long and successful work history. For the balance of 2012, we will emphasize improving our execution of the work we have in backlog."

Backlog⁽²⁾

At June 30, 2012, Willbros reported backlog from continuing operations of $2.4 billion compared to $2.3 billion at March 31, 2012. Twelve month backlog increased 36 percent to $1.2 billion at June 30, 2012 compared to $865.1 million at December 31, 2011. The major increases in backlog were in the Oil & Gas and Canada segments which increased over 47 and 62 percent, respectively, from the end of last year.

Segment Operating Results

Oil & Gas

For the second quarter of 2012, the Oil & Gas segment reported operating income of $388 thousand on revenue of $291.4 million. Revenue increased $40.5 million as compared to $250.9 million in the same period last year and the increase was primarily driven by the rapid growth of our regional offices, which now generate approximately 21 percent of segment revenue. The segment's performance was negatively impacted by a project delay associated with our customer obtaining necessary permits, which have now been received. The majority of revenue anticipated from this south Louisiana project is now expected to be generated in the third and fourth quarters. Additionally, our progress on the Red River Pipeline project was impeded by low productivity due to greater than anticipated rock excavation, which put the project in a loss position.

Utility T&D

For the second quarter of 2012, the Utility T&D segment reported operating income of $8.4 million on revenue of $170.5 million. This represents the best quarterly financial results since this segment was created after the InfrastruX acquisition. This improvement was mainly driven by higher utilization of resources in our transmission and distribution businesses and secondly by positive operating income generated in the Texas distribution business.

Canada

For the second quarter of 2012, the Canada segment reported an operating loss of $2.9 million on revenue of $37.4 million. The loss was attributable to a lump-sum capital project which encountered increased costs related to piling installation, which put the project in a loss position, as well as the delayed start-up on another project due to delays by the customer.

Liquidity

At June 30, 2012, the Company had $38.5 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 3.00 to 1.00, or less. In the second quarter of 2012, the Company paid an additional $16.7 million against its term loan and the total leverage ratio for the period ending June 30, 2012 was 3.14.

Conference Call

In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet, on Wednesday, August 8, 2012 at 9:00 a.m. Eastern Time (8:00 a.m. Central).

For those who cannot listen to the live call, a replay will be available through August 15, 2012, and may be accessed by calling 303-590-3030 or 800-406-7325 using pass code 4558374#. Also, an archive of the webcast will be available shortly after the call on www.willbros.com for a period of 12 months.

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 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 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.

CONTACT:

Michael W. Collier
Vice President Investor Relations
Willbros
713-403-8038

Connie Dever
Director Investor Relations
Willbros
713-403-8035

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SOURCE Willbros Group, Inc.