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8-K - FORM 8-K - Willbros Group, Inc.\NEW\d351225d8k.htm
EX-99.2 - TRANSCRIPT OF THE REGISTRANT'S MAY 8, 2012 CONFERENCE CALL - Willbros Group, Inc.\NEW\d351225dex992.htm

Exhibit 99.1

 

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FOR IMMEDIATE RELEASE

Willbros Reports First Quarter 2012 Results from Continuing Operations

 

   

Revenues up 29% over first quarter of 2011 to $419 million

 

   

Operating performance improves 49% over comparable period in 2011

 

   

Twelve month backlog at March 31, 2012 up 13% to $981 million

 

   

Total backlog at March 31, 2012 of $2.3 billion

 

   

Term loan balance reduced $30 million to $145.9 million

HOUSTON, TX, MAY 7, 2012 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 we have in backlog.”

 

              

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Michael W. Collier

Vice President Investor Relations

Sales & Marketing

Willbros

713-403-8038

  

1 of 6

CONTACT:

Connie Dever

Director Investor Relations

Willbros

713-403-8035


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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.

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 improve in the second half of this year as we add quality backlog with stronger embedded contract margins.

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.

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.

 

              

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Michael W. Collier

Vice President Investor Relations

Sales & Marketing

Willbros

713-403-8038

  

2 of 6

CONTACT:

Connie Dever

Director Investor Relations

Willbros

713-403-8035


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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 additional 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 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.

TABLE TO FOLLOW

 

              

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Michael W. Collier

Vice President Investor Relations

Sales & Marketing

Willbros

713-403-8038

  

3 of 6

CONTACT:

Connie Dever

Director Investor Relations

Willbros

713-403-8035


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WILLBROS GROUP, INC.

(In thousands, except per share amounts)

 

     Three Months Ended
March 31,
 
     2012     2011  

Income Statement

    

Contract revenue

    

Oil & Gas

   $ 246,935      $ 167,636   

Utility T&D

     139,313        120,544   

Canada

     34,130        37,256   

Eliminations

     (1,288     (1,647
  

 

 

   

 

 

 
     419,090        323,789   

Operating expenses

    

Oil & Gas

     246,089        176,954   

Utility T&D

     147,720        132,709   

Canada

     37,181        42,381   

Eliminations

     (1,288     (1,647
  

 

 

   

 

 

 
     429,702        350,397   

Operating income (loss)

    

Oil & Gas

     846        (9,318

Utility T&D

     (8,407     (12,165

Canada

     (3,051     (5,125

Changes in fair value of contingent earnout liability

     —          6,000   
  

 

 

   

 

 

 

Operating loss

     (10,612     (20,608

Other expense

    

Interest expense, net

     (7,894     (14,800

Loss on early extinguishment of debt

     (2,256     —     

Other, net

     (265     (221
  

 

 

   

 

 

 
     (10,415     (15,021
  

 

 

   

 

 

 

Loss from continuing operations before income taxes

     (21,027     (35,629

Provision for income taxes

     1,652        1,532   
  

 

 

   

 

 

 

Loss from continuing operations

     (22,679     (37,161

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

     2,299        (7,458
  

 

 

   

 

 

 

Net loss

     (20,380     (44,619

Less: Income attributable to noncontrolling interest

     (344     (271
  

 

 

   

 

 

 

Net loss attributable to Willbros Group, Inc.

   $ (20,724   $ (44,890
  

 

 

   

 

 

 

Reconciliation of net loss attributable to Willbros Group, Inc.

    

Loss from continuing operations

   $ (23,023   $ (37,432

Income (loss) from discontinued operations

     2,299        (7,458
  

 

 

   

 

 

 

Net loss attributable to Willbros Group, Inc.

   $ (20,724   $ (44,890
  

 

 

   

 

 

 

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

    

Continuing operations

   $ (0.48   $ (0.79

Discontinued operations

   $ 0.05      $ (0.16
  

 

 

   

 

 

 
   $ (0.43   $ (0.95
  

 

 

   

 

 

 

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

    

Continuing operations

   $ (0.48   $ (0.79

Discontinued operations

   $ 0.05      $ (0.16
  

 

 

   

 

 

 
   $ (0.43   $ (0.95
  

 

 

   

 

 

 

 

              

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Michael W. Collier

Vice President Investor Relations

Sales & Marketing

Willbros

713-403-8038

  

4 of 6

CONTACT:

Connie Dever

Director Investor Relations

Willbros

713-403-8035


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Cash Flow Data

    

Continuing operations

    

Cash provided by (used in)

    

Operating activities

   $ 20,563      $ (30,477

Investing activities

     4,193        15,540   

Financing activities

     (33,003     (41,864

Foreign exchange effects

     (1,470     1,026   

Discontinued operations

     (4,766     (6,037

Other Data (Continuing Operations)

    

Weighted average shares outstanding

    

Basic

     47,781        47,316   

Diluted

     47,781        47,316   

Adjusted EBITDA from continuing operations(1)

   $ 6,209      $ (6,601

Capital expenditures

     3,434        1,880   

Reconciliation of Non-GAAP Financial Measure

    

Adjusted EBITDA from continuing operations (1)

    

Loss from continuing operations attributable to Willbros Group, Inc.

   $ (23,023   $ (37,432

Interest expense, net

     7,894        14,800   

Provision for income taxes

     1,652        1,532   

Depreciation and amortization

     13,105        16,480   

Loss on early extinguishment of debt

     2,256        —     

Changes in fair value of contingent earnout liability

     —          (6,000

DOJ monitor cost

     1,586        2,481   

Stock based compensation

     2,088        1,401   

Restructuring and reorganization costs

     102        145   

Acquisition related costs

     —          43   

(Gain) loss on sales of equipment

     205        (322

Noncontrolling interest

     344        271   
  

 

 

   

 

 

 

Adjusted EBITDA from continuing operations

   $ 6,209      $ (6,601
  

 

 

   

 

 

 
     3/31/2012     12/31/2011  

Balance Sheet Data

    

Cash and cash equivalents

   $ 48,939      $ 58,686   

Working capital

     133,626        172,470   

Total assets

     857,644        861,771   

Total debt

     238,124        268,794   

Stockholders’ equity

     211,804        231,578   

Backlog Data (2)

    

Total By Reporting Segment

    

Oil & Gas

   $ 678,946      $ 517,597   

Utility T&D

     1,375,119        1,345,204   

Canada

     293,061        309,416   
  

 

 

   

 

 

 

Total Backlog

   $ 2,347,126      $ 2,172,217   
  

 

 

   

 

 

 

Total Backlog By Geographic Area

    

United States

   $ 1,872,478      $ 1,718,920   

Canada

     293,061        309,416   

Middle East/North Africa

     174,747        135,698   

Other International

     6,840        8,183   
  

 

 

   

 

 

 

Total Backlog

   $ 2,347,126      $ 2,172,217   
  

 

 

   

 

 

 

12 Month Backlog

   $ 980,792      $ 865,124   
  

 

 

   

 

 

 

 

              

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Michael W. Collier

Vice President Investor Relations

Sales & Marketing

Willbros

713-403-8038

  

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CONTACT:

Connie Dever

Director Investor Relations

Willbros

713-403-8035


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(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 com paring 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 m ay be different from similarly titled measures of other companies.

 

(2) Backlog is anticipated contract revenue from unemployed 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.

###

 

              

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Michael W. Collier

Vice President Investor Relations

Sales & Marketing

Willbros

713-403-8038

  

6 of 6

CONTACT:

Connie Dever

Director Investor Relations

Willbros

713-403-8035