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8-K - 8-K - Willbros Group, Inc.\NEW\d901819d8k.htm
EX-2.1 - EX-2.1 - Willbros Group, Inc.\NEW\d901819dex21.htm
EX-10.1 - EX-10.1 - Willbros Group, Inc.\NEW\d901819dex101.htm
EX-99.2 - EX-99.2 - Willbros Group, Inc.\NEW\d901819dex992.htm
EX-10.3 - EX-10.3 - Willbros Group, Inc.\NEW\d901819dex103.htm
EX-10.2 - EX-10.2 - Willbros Group, Inc.\NEW\d901819dex102.htm

Exhibit 99.1

 

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In the news release, Willbros Reports Fourth Quarter and Full Year 2014 Results from Continuing Operations, issued 31-Mar-2015 by Willbros Group, Inc. over PR Newswire, we are advised by the company that the mentions of “from continuing operations” have been removed from the first paragraph, as originally issued inadvertently. The complete, corrected release follows:

FOR IMMEDIATE RELEASE

CORRECTION: Willbros Reports Fourth Quarter and Full Year 2014 Results from Continuing Operations

 

    Company obtains covenant relief from lenders, strong new equity partner

 

    Total Liquidity at December 31, 2014 is $88.4 million

 

    Asset sales of approximately $91 million completed in past month

 

    Full year 2014 operating loss of $2.8 million

 

    Company to host conference call at 8:00 AM CT, April 1, 2015

HOUSTON, TX, MARCH 31, 2015 — Willbros Group, Inc. (NYSE: WG) announced today results for the fourth quarter and full year 2014. The Company reported a net loss in the fourth quarter of $36.0 million, or $0.72 per share, on revenue of $450.7 million, compared to a net profit of $12.8 million, or $0.27 per share, on revenue of $505.1 million for the same period in 2013. The fourth quarter results included a $14.2 million, or $0.28 per share, non-cash debt extinguishment charge, and other charges of approximately $7.0 million, or $0.14 per share, associated with the investigation behind the deterioration of certain construction projects and employee severance costs associated with headcount reductions. For the full year 2014, the Company reported a net loss attributable to Willbros Group, Inc. of $79.8 million, or $1.62 per share, on revenue of $2.0 billion, compared to a net loss of $15.9 million, or $0.32 per share, on revenue of $1.9 billion in 2013, which included a non-cash debt extinguishment charge of $11.6 million, or $0.23 per share. Fiscal 2014 results included non-cash debt extinguishment charges of $15.2 million, or $0.31 per share, primarily associated with the refinancing of our credit facilities. The fourth quarter generated an operating loss of $15.1 million compared to operating income of $15.4 million in 2013, and the full year 2014 generated an operating loss of $2.8 million compared to operating income of $31.5 million in 2013.

John T. McNabb, II, Chairman and Chief Executive Officer, commented, “Our 2014 results were impacted by challenging market conditions, losses in the regional delivery model in our Oil & Gas segment and costs we incurred to right-size the Oil & Gas segment.

“Since October we have taken decisive actions that include office closures, staff reductions and equipment sales as well as exiting the regional delivery model, which generated $49 million in losses over the last year. The restructuring we are undertaking is not without cost and our revenue levels in the Oil & Gas segment were not sufficient in the fourth quarter to offset associated trailing and indirect costs. We anticipate a similar situation in the first quarter of 2015. Our three other segments generated a positive operating performance for the year in 2014.

 

 

 

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CONTACT:

Michael W. Collier

SVP Investor Relations

Marketing & Communications

Willbros

713-403-8038


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“In the fourth quarter we completed an assessment of the regional delivery model. In January 2015, based on this assessment and in conjunction with weakening market conditions, we made the decision to transfer the management of the regional work to our legacy pipeline and facilities business units in Oil & Gas, while winding down the regional delivery model. Today the transition of management is complete. We have bolstered the capabilities of the legacy business so we can continue to operate in all areas of the country, and we are focused on cost efficiency while we build backlog. Returning our Oil & Gas segment to profitability remains our primary objective.

“To strengthen our financial position, in the last month we have completed the sale of two non-strategic business units for approximately $91 million, before customary closing costs and adjustments. The net proceeds from these sales were used to reduce our debt. We have also identified and taken actions to reduce our consolidated G&A by $28.0 million to $32.0 million from 2014 results, on an annualized basis, and we expect to realize additional cost savings going forward. Additionally, we obtained covenant relief from our lenders through March 31, 2016. Under our covenant relief agreement, our lender received an equity position of 10.1 million shares, equivalent to 16.6 percent of the outstanding shares of our common stock immediately after closing. While dilutive to our shareholder base, we believe this is a positive event which gives us the flexibility to improve our operating performance. We expect to be leaner and to be generating positive cash flow by the end of 2015.”

Backlog (2)

At December 31, 2014, Willbros reported total backlog from continuing operations of $1.4 billion compared to $2.0 billion at December 31, 2013. Twelve month backlog of $739.7 million at December 31, 2014 decreased $74.1 million from September 30, 2014. The decrease in twelve month backlog is primarily related to the burn-off of backlog on certain significant Oil & Gas projects and the continued work-off of MSA’s, which are subject to renewal options in future years, outweighing any additions to backlog for the year. Year-end total and 12-month backlog includes $137.5 million and $87.1 million, respectively, related to the Premier and UtilX sales in the first quarter of 2015. The $74.1 million decline in 12-month backlog is primarily due to a $77.9 million decline in Oil & Gas. This is the result of exiting the regional delivery model where remaining backlog at December 31, 2014 was $23.6 million, a reduction of $72.2 million. Pipeline and facilities backlog was down by $20.5 million and downstream backlog was up $14.7 million. The Company expects reduced revenue from the pipeline and facilities service line in Q1 and Q2 of 2015, with improvement in the last half of 2015 and into 2016. Twelve-month backlog increased $41.2 million from September 30, 2014 in the Utility T&D segment, which is not being impacted by the low oil price environment. The Willbros opportunity outlook reflects total prospects for the next twelve months of $5.4 Billion.

 

 

 

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CONTACT:

Michael W. Collier

SVP Investor Relations

Marketing & Communications

Willbros

713-403-8038


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Segment Operating Results

Oil & Gas

For the fourth quarter of 2014, the Oil & Gas segment generated revenue of $160.8 million and an operating loss of $11.9 million, a $13.8 million decline in operating income from the fourth quarter of 2013 when this segment generated $200.2 million in revenue. The fourth quarter 2014 results were negatively impacted by weak operating performance, exit costs in the regional offices and the reduced level of revenue, which did not enable full recovery of indirect costs. The segment reported an operating loss of $54.4 million for the full year on revenue of $826.1 million, primarily a result of losses in the regional service lines during the year, coupled with under recovery of costs in pipeline and downstream units.

Utility T&D

For the fourth quarter of 2014, the Utility T&D segment reported an operating loss of $1.2 million on revenue of $92.8 million compared to operating income of $1.6 million on revenue of $80.8 million in the fourth quarter of 2013. Results for the fourth quarter of 2014 reflect the impact of adverse weather which caused delays and lower productivity in both our transmission and distribution services. For the full year, operating income was $6.6 million on revenue of $363.8 million, down from operating income of $20.4 million on revenue of $387.0 million in 2013. The reduction in revenue was related to the completion of CREZ projects for Oncor in 2013 and lower transmission revenue as the segment transitions into new markets.

Canada

For the fourth quarter of 2014, the Canada segment generated operating income of $1.7 million on revenue of $91.5 million, compared to operating income of $9.5 million on revenue of $120.9 million in 2013. The decrease in revenue from $120.9 million reported in 2013 is attributed to decreased activity by customers in the oil sands region and the completion of a large capital project which bolstered 2013 results. For the full year, the segment generated operating income of $31.9 million on revenue of $404.6 million compared to $35.4 million of operating income on $445.2 million of revenue in 2013. Operating income declined in 2014 due to lower revenue and thinner margins in the second half of 2014 as operators reacted to the decline in oil prices by curtailing small capital projects and reducing spending on maintenance.

Professional Services

The Professional Services segment reported an operating loss of $3.7 million on revenue of $107.9 million in the fourth quarter compared to operating income of $2.4 million on revenue of $105.7 million in the fourth quarter of 2013. The decrease in the fourth quarter operating income reflects delays in the start of government projects and downstream engineering awards. For the full year, operating income was $13.1 million on revenues of $439.9 million in 2014 compared to operating income of $18.6 million on revenues $403.8 million in 2013.

 

 

 

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CONTACT:

Michael W. Collier

SVP Investor Relations

Marketing & Communications

Willbros

713-403-8038


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Outlook

Lower oil prices are having the most pronounced impact on the Company’s regional delivery model, which the Company is exiting, while market demand for its core business services is steady. The outlook for the mainline pipeline construction business, as well as associated facilities and pipeline integrity work, is expected to improve in the second half of 2015 and into 2016. Willbros also believes the prospect of more natural-gas projects is a positive development for demand for its service offerings. The Company believes its business in Canada, which has exhibited strong performance since mid-2012, will continue to generate positive operating results going forward. The higher sustaining maintenance component of Canada segment backlog is viewed by the Company as positive with respect to maintaining attractive revenue levels in Canada. However, cost containment initiatives by clients in the oil sands region and foreign exchange impacts are expected to create margin pressure in the near term and to reduce revenue by ten to fifteen percent. The Professional Services segment is experiencing what the Company believes is a short term decline in its mid-stream engineering activities, but the Company expects larger, natural gas driven opportunities in the 2016 timeframe.

Market conditions experienced by the natural gas sector since 2009 have required operators and pipeline transporters to structure their operations to be profitable in a low price environment. The Company believes that these operators will continue to initiate projects to move gas to export facilities and the Gulf Coast petrochemical manufacturing centers, driving demand for its services. The Utility T&D segment is now positioned in ten states with MSA’s and work crews. The successful UT&D geographic expansion has positioned it for increased transmission construction opportunities. The pilot project to replace overhead distribution in Virginia with underground facilities is advancing successfully and offers prospective work opportunities of greater than $750.0 million over the next ten years.

Liquidity

Total liquidity (defined as cash and cash equivalents plus revolver availability) was $88.4 million at December 31, 2014. The Company had $23.3 million of cash and cash equivalents. There were no revolver borrowings. Total liquidity at March 31, 2015 is expected to remain at similar levels. “Our asset sales and the pay-down of debt, coupled with our amended credit facility and stronger balance sheet, have positioned us to accept additional new work assignments,” commented Van Welch, Willbros Chief Financial Officer.

Guidance

Van Welch, Willbros Chief Financial Officer, commented, “We expect annual revenue to range from $1.4 to $1.6 billion in 2015. Excluding the gain from the two asset sales, we expect first quarter 2015 operating results to be lower than the fourth quarter results due to inclement weather, lower revenue and the transition underway in our Oil & Gas segment. We expect our operating results to improve in the second half of 2015.

 

 

 

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CONTACT:

Michael W. Collier

SVP Investor Relations

Marketing & Communications

Willbros

713-403-8038


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Conference Call

In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet, on Wednesday, April 1, 2015 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time).

 

What: Willbros Fourth Quarter and 2014 Earnings Conference Call
When: Wednesday, April 1, 2015 - 9:00 a.m. Eastern Time
How: Live via phone - By dialing 877-404-9648 or 412-902-0030 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 April 8, 2015 and may be accessed by calling 877-660-6853 or 201-612-7415 using pass code 13605359#. 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 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 waivers under, 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; new legislation or regulations detrimental to the economic operation of refining capacity in the United States; 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; 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.

TABLE TO FOLLOW

 

 

 

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CONTACT:

Michael W. Collier

SVP Investor Relations

Marketing & Communications

Willbros

713-403-8038


WILLBROS GROUP, INC.

(In thousands, except per share amounts)

 

     Three Months Ended
December 31,
    Year Ended
December 31,
 
     2014     2013     2014     2013  

Income Statement

        

Contract revenue

        

Oil & Gas

   $ 160,822      $ 200,156      $ 826,088      $ 663,293   

Utility T&D

     92,761        80,794        363,779        386,952   

Canada

     91,456        120,879        404,589        445,213   

Professional Services

     107,946        105,665        439,871        403,780   

Eliminations

     (2,257     (2,354     (7,578     (8,238
  

 

 

   

 

 

   

 

 

   

 

 

 
  450,728      505,140      2,026,749      1,891,000   

Operating expenses

Oil & Gas

  172,744      198,327      880,532      706,086   

Utility T&D

  93,986      79,201      357,183      366,571   

Canada

  89,717      111,393      372,662      409,837   

Professional Services

  111,675      103,223      426,758      385,213   

Eliminations

  (2,257   (2,354   (7,578   (8,238
  

 

 

   

 

 

   

 

 

   

 

 

 
  465,865      489,790      2,029,557      1,859,469   

Operating income (loss)

Oil & Gas

  (11,922   1,829      (54,444   (42,793

Utility T&D

  (1,225   1,593      6,596      20,381   

Canada

  1,739      9,486      31,927      35,376   

Professional Services

  (3,729   2,442      13,113      18,567   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

  (15,137   15,350      (2,808   31,531   

Other expense

Interest expense, net

  (7,692   (7,897   (30,354   (31,226

Loss on early extinguishment of debt

  (14,228   —        (15,176   (11,573

Other, net

  86      (319   (367   (732
  

 

 

   

 

 

   

 

 

   

 

 

 
  (21,834   (8,216   (45,897   (43,531
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes

  (36,971   7,134      (48,705   (12,000

Provision (benefit) for income taxes

  (2,710   7,591      6,573      14,534   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations

  (34,261   (457   (55,278   (26,534

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

  (1,706   13,232      (24,549   10,667   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

$ (35,967 $ 12,775    $ (79,827 $ (15,867
  

 

 

   

 

 

   

 

 

   

 

 

 

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

Continuing operations

$ (0.69 $ —      $ (1.12 $ (0.54

Discontinued operations

  (0.03   0.27      (0.50   0.22   
  

 

 

   

 

 

   

 

 

   

 

 

 
$ (0.72 $ 0.27    $ (1.62 $ (0.32
  

 

 

   

 

 

   

 

 

   

 

 

 

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

Continuing operations

$ (0.69 $ —      $ (1.12 $ (0.54

Discontinued operations

  (0.03   0.27      (0.50   0.22   
  

 

 

   

 

 

   

 

 

   

 

 

 
$ (0.72 $ 0.27    $ (1.62 $ (0.32
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash Flow Data

Continuing operations

Cash provided by (used in)

Operating activities

$ (27,858 $ 70,577    $ (29,126 $ 13,472   

Investing activities

  (674   (3,858   38,416      26,429   

Financing activities

  37,421      (31,858   1,774      (37,450

Foreign exchange effects

  (374   (1,254   (1,057   (1,564

Discontinued operations

  (34,177   (10,072   (30,344   (11,657

Other Data (Continuing Operations)

Weighted average shares outstanding

Basic

  49,630      48,704      49,310      48,560   

Diluted

  49,630      48,704      49,310      48,560   

Adjusted EBITDA from continuing operations(1)

$ 1,517    $ 25,093    $ 47,161    $ 73,994   

Purchases of property, plant and equipment

  3,391      6,051      15,082      15,471   

Reconciliation of Non-GAAP Financial Measure

Adjusted EBITDA from continuing operations (1)

Loss from continuing operations

$ (34,261 $ (457 $ (55,278 $ (26,534

Interest expense, net

  7,692      7,897      30,354      31,226   

Provision (benefit) for income taxes

  (2,710   7,591      6,573      14,534   

Depreciation and amortization

  8,835      9,155      36,245      39,030   

Loss on early extinguishment of debt

  14,228      —        15,176      11,573   

Stock based compensation

  4,246      2,339      13,617      7,066   

Restructing charges

  1,848      43      2,095      241   

Accounting and legal fees associated with the restatements

  3,413      —        3,413      —     

Gain on disposal of property and equipment

  (1,774   (1,475   (5,034   (3,142
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA from continuing operations (1)

$ 1,517    $ 25,093    $ 47,161    $ 73,994   
  

 

 

   

 

 

   

 

 

   

 

 

 


     12/31/2014      9/30/2014      6/30/2014      3/31/2014  

Balance Sheet Data

           

Cash and cash equivalents

   $ 23,273       $ 48,935       $ 28,274       $ 53,877   

Working capital

     205,702         195,558         205,354         206,689   

Total assets

     692,207         784,947         827,299         856,179   

Total debt

     289,030         241,207         258,103         254,094   

Stockholders’ equity

     113,825         147,104         149,091         161,945   

Backlog Data (2)

           

Total By Reporting Segment

           

Oil & Gas

   $ 109,840       $ 187,726       $ 315,931       $ 364,642   

Utility T&D

     803,392         799,456         946,321         872,095   

Canada

     188,508         247,216         255,812         285,364   

Professional Services

     250,574         273,144         213,557         374,824   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Backlog

$ 1,352,314    $ 1,507,542    $ 1,731,621    $ 1,896,925   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Backlog By Geographic Area

United States

$ 1,161,543    $ 1,257,858    $ 1,472,901    $ 1,607,562   

Canada

  188,508      247,216      255,812      285,364   

Other International

  2,263      2,468      2,908      3,999   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Backlog

$ 1,352,314    $ 1,507,542    $ 1,731,621    $ 1,896,925   
  

 

 

    

 

 

    

 

 

    

 

 

 

12 Month Backlog

$ 739,674    $ 813,835    $ 962,744    $ 1,065,508   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(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) 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.