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Exhibit 99.1

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Willbros Reports Third Quarter 2017 Results

 

    Increased focus on growing Utility T&D business with exit of US Mainline Pipeline business; no impact on Facilities, Pipeline Integrity or Lineal businesses

 

    Term Loan amendment increases covenant flexibility

 

    Company to host conference call at 9am CT on November 9, 2017

HOUSTON, TX, November 8, 2017 — Willbros Group, Inc. (NYSE: WG) today reported an operating loss of $27.8 million in the third quarter of 2017 compared to an operating loss of $6.3 million in the third quarter of 2016. Revenue in the third quarter of 2017 totaled $240.8 million, an increase of $13.3 million sequentially and compares to $174.8 million in the third quarter of 2016. Operating results for the third quarter of 2017 include $13.0 million of losses on three pipeline projects in the Oil & Gas segment and margin erosion in the Utility T&D segment on two projects plus customer volume reserves totaling $8.4 million.

For the third quarter of 2017, the Company reported a loss from continuing operations of $32.7 million, or $(0.52) per share, compared to a loss from continuing operations of $10.7 million, or $(0.17) per share, in the third quarter of 2016. Adjusted EBITDA from continuing operations was $(23.5) million for the third quarter of 2017 compared to $0.3 million for the third quarter of 2016.

For the nine months ended September 30, 2017, loss from continuing operations was $51.6 million, or $(0.83) per share, compared to a $29.7 million loss from continuing operations, or $(0.49) per share, for the nine months ended September 30, 2016. Adjusted EBITDA from continuing operations was $(27.0) million for the nine months ended September 30, 2017 compared to $3.7 million for the nine months ended September 30, 2016.

On November 6, 2017, the Company reached agreement with its lender to borrow an additional $15 million under its Term Loan and to amend the associated financial covenants. This amendment provides for a covenant holiday for the third and fourth quarter of 2017 and less stringent covenants for all of 2018.

Michael J. Fournier, President and CEO, commented, “The operating loss in the third quarter is a disappointment. While we may recover some of the project cost overruns through future change orders, these operating results required us to enhance our liquidity and seek covenant relief from our lender. Further, the risk profile we have experienced with our U.S. mainline pipeline business is not sustainable. Thus, we intend to exit this business and are in exclusive discussions with a potential buyer. These actions do not impact our U.S. facilities, pipeline integrity or Lineal businesses.

We will be assessing options to refinance our debt agreements during the first half of 2018 and we are pursuing a strategic process to accelerate expansion of our Utility T&D business.”

 

 

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CONTACT:

Stephen W. Breitigam

SVP Investor Relations

Willbros

713-403-8172


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Included in this press release are certain non-GAAP financial measures, including Adjusted EBITDA from continuing operations and Covenant EBITDA from continuing operations. A related reconciliation of each of these non-GAAP measures is included in the accompanying schedules.

Backlog

At September 30, 2017, the Company reported total backlog of $741.3 million, a decrease of $67.3 million from the June 30, 2017 balance. Twelve month backlog of $543.9 million at September 30, 2017 reflects a small decrease from the $546.9 million reported at June 30, 2017. A substantial portion of the total backlog decline is attributable to the expiration of existing multi-year MSA contracts. We will rebid these MSA’s as they come up for renewal but we do not include these new contracts in backlog until they are signed.

Segment Operating Results

Utility T&D

The Utility T&D segment reported revenue in the third quarter of $129.9 million, down $21.8 million, or 14%, sequentially and primarily due to reduced transmission work in our Chapman business unit. Driven primarily by lower revenue, margin erosion on two discrete projects and recognition of a volume reserve triggered by receipt of a new customer forecast for 2017 services, the segment generated an operating loss of $7.5 million in the third quarter of 2017 compared to operating income of $11.0 million in the second quarter of 2017.

Oil & Gas

For the third quarter of 2017, the Oil & Gas segment reported revenue of $75.3 million, up 54% sequentially as the mainline pipeline and Lineal businesses operated at high activity levels throughout the quarter. Three projects were located in the same area and hampered by weather and terrain issues, along with other operating issues. Losses on these projects contributed to an operating loss of $14.8 million for the segment in the third quarter of 2017.

Canada

Canada reported revenue of $35.6 million for the third quarter of 2017, an $8.9 million increase when compared to the second quarter of 2017. Revenue in the maintenance business has returned to near historical levels towards the end of the third quarter while activity associated with our industrial and pipeline construction businesses remain depressed. The segment operated at near break-even status as it reported an operating loss of $0.3 million in the third quarter of 2017.

 

 

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CONTACT:

Stephen W. Breitigam

SVP Investor Relations

Willbros

713-403-8172


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Liquidity and Debt

Total liquidity (defined as cash and cash equivalents plus revolver availability) at September 30, 2017 was $48.8 million, a decrease of $1.8 million from the end of the second quarter of 2017. Cash and cash equivalents totaled $31.3 million at September 30, 2017. During the third quarter of 2017 we borrowed $12 million under the revolving credit facility, plus an additional $17 million on November 6, 2017, to support our working capital and operating needs. The revolving credit facility expires in August 2018.

At September 30, 2017, the principal amount due on our Term Loan remained unchanged from the prior quarter at $92.2 million. With the recent amendment to our Term Loan, the principal balance will increase to $107.2 million.

Guidance

Jeff Kappel, Willbros Chief Financial Officer, commented, “We are reaffirming revenue guidance for 2017 to range between $850 million to $900 million, excluding the Tank Services business. For 2018, we anticipate revenue to range between $750 million and $825 million, excluding the U.S. Mainline Pipeline and Tank Services businesses.”

Conference Call

In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the internet, on Thursday, November 9, 2017 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).

 

What:    Willbros Third Quarter 2017 Earnings Conference Call
When:    Thursday, November 9, 2017 - 10 a.m. Eastern Time
How:    Live via phone - By dialing 1-844-850-0544 (U.S. Toll Free), 1-855-669-9657 (Canada Toll Free) or 1-412-317-5201 (International) a few minutes prior to the start time and asking for the Willbros Group, Inc. call.
  

Live over the internet - By logging on to the website at the following address:

 

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

A replay will be available through November 16, 2017 and may be accessed by calling 1-877-344-7529 (U.S. Toll Free), 1-855-669-9658 (Canada Toll Free) or 1-412-317-0088 (International) using Replay Access Code 10114025. Also, an archive of the webcast will be available shortly after the call on www.willbros.com.

 

 

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CONTACT:

Stephen W. Breitigam

SVP Investor Relations

Willbros

713-403-8172


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Willbros is a specialty energy infrastructure contractor serving the oil and gas and power industries with offerings that primarily include construction, maintenance and facilities development 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 unanticipated accounting or other issues regarding any material weaknesses in internal control over financial reporting; inability of the Company or its independent auditor to confirm relevant information or data; unanticipated issues that prevent or delay the Company’s independent auditor from completing its review of financial statements or that require additional efforts, procedures or review; the untimely filing of financial statements; pending and potential investigations and lawsuits; the identification of one or more issues that require restatement of one or more other prior period financial statements; ability to remain in compliance with, or obtain additional waivers or amendments under, or refinance, the Company’s existing loan agreements; ability to dispose of businesses and assets in a timely manner at reasonable valuations; the existence of other material weaknesses in internal control over financial reporting; contract and billing disputes; availability of quality management; availability and terms of capital; changes in, or the failure to comply with, government regulations; 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; development trends of the oil and gas, and power 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.

SCHEDULES TO FOLLOW

###

 

 

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CONTACT:

Stephen W. Breitigam

SVP Investor Relations

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713-403-8172


WILLBROS GROUP, INC.

(In thousands, except per share amounts)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2017     2016     2017     2016  

Income Statement

        

Contract revenue

        

Oil & Gas

   $ 75,284     $ 33,100     $ 146,748     $ 147,174  

Utility T&D

     129,906       106,422       397,097       313,066  

Canada

     35,583       35,355       88,275       107,343  

Eliminations

     —         (56     —         (290
  

 

 

   

 

 

   

 

 

   

 

 

 
     240,773       174,821       632,120       567,293  

Operating expenses

        

Oil & Gas

     90,050       37,483       172,284       158,193  

Utility T&D

     137,381       102,160       392,804       299,584  

Canada

     35,879       35,696       93,625       106,229  

Unallocated Corporate Costs

     5,252       5,857       15,691       22,098  

Eliminations

     —         (56     —         (290
  

 

 

   

 

 

   

 

 

   

 

 

 
     268,562       181,140       674,404       585,814  

Operating income (loss)

        

Oil & Gas

     (14,766     (4,383     (25,536     (11,019

Utility T&D

     (7,475     4,262       4,293       13,482  

Canada

     (296     (341     (5,350     1,114  

Unallocated Corporate Costs

     (5,252     (5,857     (15,691     (22,098
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (27,789     (6,319     (42,284     (18,521

Non-operating expenses

        

Interest expense

     (3,817     (3,564     (10,972     (10,433

Interest income

     8       12       23       443  

Debt covenant suspension and extinguishment charges

     —         —         —         (63

Other, net

     21       2       2       —    
  

 

 

   

 

 

   

 

 

   

 

 

 
     (3,788     (3,550     (10,947     (10,053
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income taxes

     (31,577     (9,869     (53,231     (28,574

Provision (benefit) for income taxes

     1,132       792       (1,665     1,146  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations

     (32,709     (10,661     (51,566     (29,720

Loss from discontinued operations net of provision for income taxes

     (1,496     (1,325     (1,508     (3,836
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (34,205   $ (11,986   $ (53,074   $ (33,556
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic loss per share attributable to Company shareholders:

        

Continuing operations

   $ (0.52   $ (0.17   $ (0.83   $ (0.49

Discontinued operations

     (0.02     (0.02     (0.02     (0.06
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (0.54   $ (0.19   $ (0.85   $ (0.55
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted loss per share attributable to Company shareholders:

        

Continuing operations

   $ (0.52   $ (0.17   $ (0.83   $ (0.49

Discontinued operations

     (0.02     (0.02     (0.02     (0.06
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (0.54   $ (0.19   $ (0.85   $ (0.55
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash Flow Data

        

Continuing operations

        

Cash provided by (used in)

        

Operating activities

   $ (22,574   $ (5,290   $ (21,557   $ (8,232

Investing activities

     591       1,888       2,280       6,639  

Financing activities

     11,962       (2,349     9,152       (8,570

Foreign exchange effects

     641       (308     1,055       620  

Discontinued operations

     (575     (408     (1,056     (7,030

Other Data (Continuing Operations)

        

Weighted average shares outstanding

        

Basic

     62,310       61,640       62,105       61,258  

Diluted

     62,310       61,640       62,105       61,258  

Adjusted EBITDA from continuing operations(1)

   $ (23,501   $ 331     $ (26,954   $ 3,659  

Purchases of property, plant and equipment

     806       628       2,132       2,528  

Reconciliation of Non-GAAP Financial Measures

        

Adjusted EBITDA from continuing operations (1)

        

Loss from continuing operations

   $ (32,709   $ (10,661   $ (51,566   $ (29,720

Interest expense

     3,817       3,564       10,972       10,433  

Interest income

     (8     (12     (23     (443

Provision (benefit) for income taxes

     1,132       792       (1,665     1,146  

Depreciation and amortization

     4,643       5,385       14,600       16,694  

Debt covenant suspension and extinguishment charges

     —         —         —         63  

Stock based compensation

     587       868       2,121       3,269  

Restructuring and reorganization costs

     (91     308       535       4,587  

Accounting and legal fees associated with the restatements

     240       4       617       (42

Fort McMurray wildfire related costs

     —         —         —         523  

(Gain) loss on disposal of property and equipment

     (1,112     83       (2,545     (2,851
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA from continuing operations(1)

   $ (23,501   $ 331     $ (26,954   $ 3,659  

Gain on disposal of property and equipment, normal course of business

     1,112       124       2,545       3,181  

Changes in project loss provision

     3,936       1,470       487       828  

Letter of credit fees

     421       349       1,237       1,047  

Provision for bad debt

     60       66       178       106  

Exit of Tank Services

     85       773       1,230       3,152  
  

 

 

   

 

 

   

 

 

   

 

 

 

Covenant EBITDA from continuing operations(2)

   $ (17,887   $ 3,113     $ (21,277   $ 11,973  
  

 

 

   

 

 

   

 

 

   

 

 

 


     September 30,
2017
     June 30,
2017
     March 31,
2017
     December 31,
2016
 

Balance Sheet Data

           

Cash and cash equivalents

   $ 31,294      $ 41,249      $ 36,693      $ 41,420  

Working capital

     56,620        84,033        75,756        89,323  

Total assets

     400,553        382,108        366,285        363,036  

Total debt

     100,927        88,179        87,466        89,189  

Stockholders’ equity

     86,295        118,624        118,614        135,137  

Backlog Data (3)

           

12 Month Backlog by Reporting Segment

           

Oil & Gas

   $ 159,213      $ 116,366      $ 87,750      $ 28,827  

Utility T&D

     329,531        355,480        362,749        349,998  

Canada

     55,127        75,051        77,918        41,041  
  

 

 

    

 

 

    

 

 

    

 

 

 

12 Month Backlog

   $ 543,871      $ 546,897      $ 528,417      $ 419,866  
  

 

 

    

 

 

    

 

 

    

 

 

 

12 Month Backlog exclusive of Exited Services

           

12 Month Backlog, as reported

   $ 543,871      $ 546,897      $ 528,417      $ 419,866  

U.S. Mainline Pipeline Construction Services 12 Month Backlog

     47,123        58,097        45,084        5,434  

Tank Services 12 Month Backlog

     21,099        26,351        28,813        15,189  
  

 

 

    

 

 

    

 

 

    

 

 

 

12 Month Backlog, exclusive of Exited Services

   $ 475,649      $ 462,449      $ 454,520      $ 399,243  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total By Reporting Segment

           

Oil & Gas

   $ 159,213      $ 116,366      $ 87,750      $ 28,827  

Utility T&D

     459,417        540,876        605,706        656,838  

Canada

     122,644        151,336        158,999        106,793  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Backlog

   $ 741,274      $ 808,578      $ 852,455      $ 792,458  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Backlog exclusive of Exited Services

           

Total Backlog, as reported

   $ 741,274      $ 808,578      $ 852,455      $ 792,458  

U.S. Mainline Pipeline Construction Services Total Backlog

     47,123        58,097        45,084        5,434  

Tank Services Total Backlog

     21,099        26,351        28,813        15,189  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Backlog, exclusive of Exited Services

   $ 673,052      $ 724,130      $ 778,558      $ 771,835  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(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. 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) Covenant EBITDA from continuing operations is a non-GAAP measure that conforms to the definition of Consolidated EBITDA in the Company’s 2014 Term Credit Agreement which includes certain special items. Management uses Covenant EBITDA from continuing operations to determine the Company’s compliance with certain financial covenants under the 2014 Term Credit Agreement.
(3) 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. Backlog is not a term recognized under U.S. GAAP; however, it is a common measurement used in our industry.