EX-99.1 4 d840545dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

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FOR IMMEDIATE RELEASE

Willbros Reports Third Quarter 2014 Results from Continuing Operations

 

    Operating income of $11.4 million

 

    Adjusted EBITDA(1) of $24.3 million

 

    Year-to-date operating income of $12.3 million

 

    Year-to-date adjusted EBITDA(1) of $45.6 million

 

    Filed restated results for first and second quarters of 2014

 

    Company will host conference call on Tuesday, December 16, 2014

HOUSTON, TX (DEC. 15, 2014) — Willbros Group, Inc. (NYSE: WG) filed its restated results for the periods ended March 31, 2014 and June 30, 2014 and filed results from continuing operations for the third quarter of 2014. The Company reported net income from continuing operations of $0.9 million, or $0.02 per diluted share, on revenue of $559.7 million, compared to a net loss from continuing operations in the third quarter of 2013 of $12.0 million, or $0.25 per share, on revenue of $479.1 million. The Company reported operating income of $11.4 million, flat compared to the third quarter of 2013. Adjusted EBITDA(1) of $24.3 million for the third quarter of 2014 was up compared to $21.5 million for the same period last year. Year-to-date operating income and adjusted EBITDA(1) at September 30, 2014 were, respectively, $12.3 million and $45.6 million, compared to $16.2 million and $48.9 million for the same period in 2013.

John McNabb, Chairman and Chief Executive Officer, commented, “Results matter, and we had positive operating performance for the first nine months in our Canada, Professional Services and Utility T&D segments. In our Oil & Gas segment, we have strengthened the management team and we continue to transition the regional business model into a project-based delivery model. We believe this model better aligns the work we undertake to our core skillsets and provides better control of our business.

“We are also committed to strengthening our balance sheet through non-core asset sales to help maintain satisfactory liquidity for the work opportunities we see ahead. We plan to focus our resources on our best performing service lines and market opportunities to generate better results,” added McNabb.

Segment Operating Results

Oil & Gas

For the third quarter of 2014, the Oil & Gas segment reported contract revenue of $253.7 million, an increase of $93.5 million compared to the third quarter of 2013. Operating income of $1.1 million was an improvement of $9.4 million from the third quarter of 2013. This improvement was primarily driven by the successful execution of a large diameter pipeline project and multiple mid-size pipeline projects. Year-to-date operating results for the segment are a loss of $42.5 million on revenue of $665.3 million compared to a loss of $44.6 million on revenue of $463.1 million in the first nine months of 2013.

 

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Michael W. Collier

SVP Investor Relations

Marketing & Communications

Willbros

713-403-8038

  

Leah Martinez

Corporate Marketing Manager

Willbros

713-403-8084


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Utility T&D

For the third quarter of 2014, the Utility T&D segment reported break-even operating results on revenue of $93.6 million compared to operating income of $1.9 million on revenue of $91.9 million in the third quarter of 2013. Peak loads during summer weather reduced access to certain project corridors. The segment continues to expand its geographic footprint in areas adjacent to Texas and along the Atlantic seaboard and is transitioning to a more balanced customer base for transmission and distribution services. Year-to-date operating results are income of $7.8 million on revenue of $271.0 million compared to operating income of $18.8 million on revenue of $306.2 million in the first nine months of 2013.

Canada

Canada reported third quarter operating income of $5.5 million, on revenue of $100.8 million compared to operating income of $11.1 million, on revenue of $124.9 million in the third quarter of 2013. The decline in revenue and operating income is related to completion of a major project which generated revenue and income in the same period last year. Canada continues its focus on the construction and maintenance opportunities in existing oil sands mining facilities. Year-to-date operating results are income of $30.2 million on revenue of $313.1 million compared to operating income of $25.9 million on revenue of $324.3 million in the first nine months of 2013.

Professional Services

Revenue generated by the Professional Services segment increased 9.2 percent to $113.2 million compared to $103.7 million in the third quarter of 2013. The revenue increase was attributable to greater demand for front end engineering and design services and traditional pipeline engineering services. The segment reported operating income of $4.8 million, a decrease of $1.9 million compared to the third quarter of 2013. The decrease quarter-over-quarter was primarily driven by lower margins in downstream engineering services and government services. Year-to-date operating results are income of $16.8 million on revenue of $331.9 million compared to operating income of $16.1 million on revenue of $298.1 million in the first nine months of 2013.

Backlog(2)

At September 30, 2014, total backlog was approximately $1.5 billion and 12 month backlog was approximately $0.8 billion. In comparison to December 31, 2013, total backlog decreased approximately $462.7 million and 12 month backlog decreased approximately $225.6 million. These decreases are primarily related to the burn-off of backlog on certain significant Oil & Gas projects and the continued work-off of MSAs, which are subject to renewal options in future years.

 

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Michael W. Collier

SVP Investor Relations

Marketing & Communications

Willbros

713-403-8038

  

Leah Martinez

Corporate Marketing Manager

Willbros

713-403-8084


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Liquidity

At September 30, 2014, the Company had $48.9 million of cash and cash equivalents. During the third quarter of 2014 the Company paid $3.8 million due for the WAPCo liability and expects to make the final $32.7 million settlement payment at year end. The Company also reduced its revolver borrowings to $15.0 million during the third quarter. Unused availability under its revolver at September 30, 2014 was $53.3 million, net of $19.7 million availability reserve for the WAPCo liability and $57.4 million outstanding letters of credit, on a borrowing base of $145.4 million. As of September 30, 2014, the Company was in compliance with all financial covenants under the 2013 Credit Facilities, as modified by the Third Amendment executed on November 12, 2014.

Conference Call

In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet, on Tuesday, December 16, 2014 at 10:00 a.m. Eastern Time (9:00 a.m. Central). Interested parties may access the live call via phone by dialing 201-689-8349 or toll free at 877-407-8293 a few minutes prior to the start time and asking for the Willbros’ call. Or live over the Internet by logging on to 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 December 31, 2014 and may be accessed by calling 201-612-7415 or toll free at 877-660-6853 using pass code 13597474#. 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, including such things as expected operating results, business strategy and planned asset sales. 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 weakness in internal control over financial reporting as a result of the restatement of financial statements; 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; the impact of any investigations and lawsuits; the identification of one or more issues, including those relating to the restatement discussed above, 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; inability to obtain adequate financing on reasonable terms; 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; 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; timely award of prospective projects the Company is pursuing; 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.

 

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Michael W. Collier

SVP Investor Relations

Marketing & Communications

Willbros

713-403-8038

  

Leah Martinez

Corporate Marketing Manager

Willbros

713-403-8084


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TABLE TO FOLLOW

 

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Michael W. Collier

SVP Investor Relations

Marketing & Communications

Willbros

713-403-8038

  

Leah Martinez

Corporate Marketing Manager

Willbros

713-403-8084


WILLBROS GROUP, INC.

(In thousands, except per share amounts)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2014     2013     2014     2013  

Income Statement

        

Contract revenue

        

Oil & Gas

   $ 253,727      $ 160,233      $ 665,266      $ 463,137   

Utility T&D

     93,630        91,922        271,018        306,158   

Canada

     100,777        124,914        313,133        324,334   

Professional Services

     113,160        103,655        331,925        298,115   

Eliminations

     (1,601     (1,620     (5,321     (5,884
  

 

 

   

 

 

   

 

 

   

 

 

 
     559,693        479,104        1,576,021        1,385,860   

Operating expenses

        

Oil & Gas

     252,632        168,550        707,788        507,759   

Utility T&D

     93,608        90,072        263,197        287,370   

Canada

     95,319        113,839        282,945        298,444   

Professional Services

     108,317        96,911        315,083        281,990   

Eliminations

     (1,601     (1,620     (5,321     (5,884
  

 

 

   

 

 

   

 

 

   

 

 

 
     548,275        467,752        1,563,692        1,369,679   

Operating income (loss)

        

Oil & Gas

     1,095        (8,317     (42,522     (44,622

Utility T&D

     22        1,850        7,821        18,788   

Canada

     5,458        11,075        30,188        25,890   

Professional Services

     4,843        6,744        16,842        16,125   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     11,418        11,352        12,329        16,181   

Other expense

        

Interest expense, net

     (7,467     (8,220     (22,662     (23,329

Loss on early extinguishment of debt

     —          (11,573     (948     (11,573

Other, net

     (342     (336     (453     (413
  

 

 

   

 

 

   

 

 

   

 

 

 
     (7,809     (20,129     (24,063     (35,315
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes

     3,609        (8,777     (11,734     (19,134

Provision for income taxes

     2,739        3,205        9,283        6,943   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     870        (11,982     (21,017     (26,077

Loss from discontinued operations net of provision for income taxes

     (4,229     (13,951     (22,843     (2,565
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (3,359   $ (25,933   $ (43,860   $ (28,642
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Continuing operations

   $ 0.02      $ (0.25   $ (0.43   $ (0.54

Discontinued operations

     (0.09     (0.29     (0.46     (0.05
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (0.07   $ (0.54   $ (0.89   $ (0.59
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Continuing operations

   $ 0.02      $ (0.25   $ (0.43   $ (0.54

Discontinued operations

     (0.08     (0.29     (0.46     (0.05
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (0.06   $ (0.54   $ (0.89   $ (0.59
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash Flow Data

        

Continuing operations

        

Cash provided by (used in)

        

Operating activities

   $ 46,816      $ (62,617   $ (1,268   $ (57,105

Investing activities

     (2,536     (4,454     39,090        30,287   

Financing activities

     (16,064     38,417        (35,647     (5,592

Foreign exchange effects

     (577     209        (683     (310

Discontinued operations

     (6,978     (5,090     3,833        (1,585

Other Data (Continuing Operations)

        

Weighted average shares outstanding

        

Basic

     49,415        48,642        49,202        48,512   

Diluted

     50,227        48,642        49,202        48,512   

Adjusted EBITDA from continuing operations(1)

   $ 24,277      $ 21,540      $ 45,644      $ 48,901   

Purchases of property, plant and equipment

     3,338        4,820        11,691        9,420   

Reconciliation of Non-GAAP Financial Measure

        

Adjusted EBITDA from continuing operations (1)

        

Income (loss) from continuing operations

   $ 870      $ (11,982   $ (21,017   $ (26,077

Interest expense, net

     7,467        8,220        22,662        23,329   

Provision for income taxes

     2,739        3,205        9,283        6,943   

Depreciation and amortization

     8,851        9,149        27,410        29,875   

Loss on early extinguishment of debt

     —          11,573        948        11,573   

Stock based compensation

     4,862        1,966        9,371        4,727   

Restructuring and reorganization costs

     27        44        247        198   

Gain on disposal of property and equipment

     (539     (635     (3,260     (1,667
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA from continuing operations (1)

   $ 24,277      $ 21,540      $ 45,644      $ 48,901   
  

 

 

   

 

 

   

 

 

   

 

 

 


            6/30/2014      3/31/2014         
     9/30/2014      (As Restated)      (As Restated)      12/31/2013  

Balance Sheet Data

           

Cash and cash equivalents

   $ 48,935       $ 28,274       $ 53,877       $ 42,569   

Working capital

     195,558         205,354         206,689         248,086   

Total assets

     784,947         827,299         856,179         870,668   

Total debt

     241,207         258,103         254,094         277,208   

Stockholders’ equity

     147,104         149,091         161,945         188,774   

Backlog Data (2)

           

Total By Reporting Segment

           

Oil & Gas

   $ 187,726       $ 315,931       $ 364,642       $ 368,776   

Utility T&D

     799,456         946,321         990,004         860,260   

Canada

     247,216         255,812         285,364         365,946   

Professional Services

     273,144         213,557         256,915         375,256   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Backlog

   $ 1,507,542       $ 1,731,621       $ 1,896,925       $ 1,970,238   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Backlog By Geographic Area

           

United States

   $ 1,257,858       $ 1,472,901       $ 1,607,562       $ 1,599,796   

Canada

     247,216         255,812         285,364         365,946   

Other International

     2,468         2,908         3,999         4,496   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Backlog

   $ 1,507,542       $ 1,731,621       $ 1,896,925       $ 1,970,238   
  

 

 

    

 

 

    

 

 

    

 

 

 

12 Month Backlog

   $ 813,835       $ 962,744       $ 1,065,508       $ 1,039,386   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(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.