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Last updated on April 18, 2014 at 14:49 EDT

Willbros Reports Fourth Quarter and Full Year 2012 Results from Continuing Operations

March 6, 2013

HOUSTON, March 6, 2013 /PRNewswire/ — Willbros Group, Inc. (NYSE: WG) announced today results from continuing operations for the fourth quarter and full year 2012. The Company reported a loss from continuing operations in the fourth quarter of $2.9 million, or $0.06 per share, on revenue of $573.1 million. Fourth quarter 2012 results included a non-cash goodwill impairment charge of $8.1 million, or $0.17 per share. Excluding the impact of the impairment charge, the Company would have reported net income of $5.2 million, or $0.11 per share((1)). In the fourth quarter of 2012, reported operating income was $7.1 million compared to an operating loss of $42.4 million in the fourth quarter of 2011 on revenue of $371.3 million. Excluding the impairment charges in both years, operating income for the fourth quarter of 2012 would have been $15.1 million compared to an operating loss of $7.4 million in the fourth quarter of 2011((1)).

Randy Harl, President and Chief Executive Officer, commented, “In early 2012, we implemented action plans to turn around the performance of our strategic but underperforming businesses that were negatively impacting our results. We made meaningful progress to improve many of these businesses, including Downstream Engineering and our Texas utility distribution business. Additionally, our Upstream Engineering, EPC, integrity and Canadian field services work performed as planned, or better than expected. Our strategy to reduce the impact of seasonality in our businesses during the first and fourth quarters is proving successful as evidenced by improving top line and operating results. Our Adjusted EBITDA((2)) of $27.9 million from continuing operations for the fourth quarter 2012 compares favorably to the 2011 fourth quarter result of $4.6 million and 2012 full year Adjusted EBITDA((2)) of $81.8 million is an improvement of 63 percent year over year.

“Our key objectives in 2013 are to improve both our operating results and our financial flexibility. We intend to improve our performance through strengthening our project management capabilities, bolstering our training programs and adding work with more favorable terms and conditions to backlog. In addition, we expect to further reduce our debt to strengthen the balance sheet. As we continue to analyze the performance of our business units, we are taking actions to improve operating margins or exiting the businesses which do not meet our objectives. We expect these actions to drive incremental improvement in all our continuing businesses in 2013.”

For the full year 2012, the Company reported a net loss from continuing operations attributable to Willbros Group, Inc. of $18.8 million, or $0.39 per share, on revenue of $2.0 billion compared to a net loss of $201.6 million, or $4.25 per share, on revenue of $1.5 billion in 2011. Operating income for the full year 2012 was $21.2 million. 2012 results include a non-cash, after-tax goodwill impairment charge related to the Utility T&D segment. 2011 results were impacted by two non-cash, after-tax charges including goodwill impairment charges related to all three segments which were partially offset by a reduction in the fair value of the contingent earnout liability associated with the acquisition of InfrastruX. Excluding these charges, full year 2012 results would have been a net loss from continuing operations of approximately $10.7 million, or $0.22 per share compared to a net loss of $33.0 million, or $0.69 per share in 2011((1)).

Backlog((3))

At December 31, 2012, Willbros reported total backlog from continuing operations of $2.2 billion up approximately 7 percent from last year. Twelve month backlog at the end of 2012 was $1.1 billion up over $240 million from December 31, 2011. In January 2013, the Company sold its Oman operations and associated backlog of $132 million.

Segment Operating Results

Oil & Gas

For the fourth quarter of 2012, the Oil & Gas segment reported operating income of $4.5 million on revenue of $356.1 million and for the full year, operating income of $15.6 million on revenue of $1.3 billion. These results reflect positive performance in our Professional Services and Upstream pipeline and facilities construction businesses. During 2012, revenue generated from our Regional businesses increased nearly $200 million from the prior year. Our focus is on increasing profitability in our regional offices and on improving project execution across all our Oil & Gas business units.

Utility T&D

The Utility T&D segment reported an operating loss of $3.3 million on revenue of $130.4 million during the fourth quarter of 2012, which included a non-cash goodwill impairment charge of $8.1 million, partially related to the decision to sell the Hawkeye operations. For the full year, the Utility T&D segment reported operating income of $5.7 million on revenue of $526.0 million. Excluding the goodwill impairment charge, operating income would have been $4.7 million for the fourth quarter of 2012 and $13.7 million for the full year((1)).( )Our performance in the Utility T&D segment continues to improve and the profitability of our Texas Utility T&D business in the second half of the year is the result of meaningful improvement of a previously underperforming business unit.

Canada

For the fourth quarter of 2012, the Canada segment reported operating income of $5.9 million on revenue of $87.9 million and an operating loss of $40 thousand on revenue of $216.8 million for the full year. In the fourth quarter, revenue increased $30 million from the third quarter and we believe we are on track to achieve the $300 million annual revenue run rate we anticipated. This higher level of activity enabled us to improve operating margins as we more fully aligned our revenue with the indirect and overhead costs we developed to capitalize on this market.

Liquidity

At December 31, 2012, the Company had $54.4 million of cash and equivalents. In November of 2012, the Company amended and restated its 2010 Credit Agreement. The amendment included a $60.0 million term loan increase which provided additional working capital to the Company and the expiration of the Revolving Credit Facility was extended from June 2013 to June 2014. In accordance with the Amended and Restated Credit Agreement, the Revolving Credit Facility was utilized to fund the repayment of the Company’s $32.1 million of 6.5% Senior Convertible Notes which came due on December 15, 2012. In addition, the Company paid down the Revolving Credit Facility by $12.0 million in November 2012 and, by $34.0 million in January 2013, using the net proceeds from the sale of the Company’s Oman business. These reductions in the Revolving Credit Facility balance created additional borrowing capacity through June 30, 2013 under the terms of the Credit Agreement.

Guidance

Van Welch, Willbros Chief Financial Officer, provided expectations for 2013, “We expect annual revenue to range from $1.9 to $2.1 billion, excluding the Hawkeye and Oman businesses, and debt reduction of $50-$100 million by the end of the year. Our business model has experienced improved results in the first and fourth quarters year over year and we expect that trend to continue, with the strongest operating results in the second and third quarters.

“Our approved capital expenditure budget for 2013 is $25.0 million, but, as in 2012, capital spending is expected to be a function of future work commitments and the terms and conditions offered in the equipment rental market.

“We will continue to pursue opportunities to reduce our financial leverage and strengthen our overall balance sheet. These steps may include additional sales of non-strategic and underperforming assets (including equipment, real property and businesses) as well as accessing capital markets to reduce or refinance our indebtedness.”

Conference Call

In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet, on Thursday, March 7, 2013 at 9:00 a.m. Eastern Time (8:00 a.m. Central).

    What:  Willbros Fourth Quarter and 2012 Earnings Conference Call

    When:  Thursday, March 7, 2013 - 9:00 a.m. Eastern Time

    How:    Live via phone -By dialing 480-629-9644 or 877-941-8631 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 March 14, 2013, and may be accessed by calling 303-590-3030 or 800-406-7325 using pass code 4604276#. 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 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 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 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.

                                                   CONTACT

           Michael W. Collier                 Connie Dever

      Vice President Investor
                    Relations  Director Investor Relations

            Sales & Marketing                     Willbros

                     Willbros                 713-403-8035

                 713-403-8038

TABLE TO FOLLOW

                                                                                                               WILLBROS GROUP, INC.

                                                                                                     (In thousands, except per share amounts)

                                                                                       Three Months Ended                                Year Ended

                                                                                          December 31,                                  December 31,
                                                                                         ------------                                  ------------

                                                                                                          2012                                          2011                                          2012                                          2011
                                                                                                          ----                                          ----                                          ----                                          ----

    Income Statement
    ----------------

                          Contract revenue
                          ----------------

                          Oil & Gas                                 $356,071                                      $215,860                                    $1,262,954                                      $885,521

                          Utility T&D                                130,406                                       114,363                                       525,966                                       411,573

                          Canada                                      87,913                                        41,156                                       216,793                                       153,411

                          Eliminations                                (1,255)                                          (67)                                       (1,467)                                         (307)

                                                                                                       573,135                                       371,312                                     2,004,246                                     1,450,198

                           Operating
                           expenses
                          ----------

                          Oil & Gas                                  351,554                                       255,678                                     1,247,400                                       928,828

                          Utility T&D                                133,726                                       116,260                                       520,284                                       561,585

                          Canada                                      82,035                                        41,889                                       216,833                                       150,951

                           Changes in
                           fair value of
                           earn out
                           liability                                       -                                             -                                             -                                       (10,000)

                          Eliminations                                (1,255)                                          (67)                                       (1,467)                                         (307)

                                                                                                       566,060                                       413,760                                     1,983,050                                     1,631,057

                           Operating income
                           (loss)
                          -----------------

                          Oil & Gas                                    4,517                                       (39,818)                                       15,554                                       (43,307)

                          Utility T&D                                 (3,320)                                       (1,897)                                        5,682                                      (150,012)

                          Canada                                       5,878                                          (733)                                          (40)                                        2,460

                           Changes in
                           fair value of
                           earn out
                           liability                                       -                                             -                                             -                                        10,000
                                                                                                                                                                     ---                                        ------

                           Operating income
                           (loss)                                      7,075                                       (42,448)                                       21,196                                      (180,859)

                          Other expense
                          -------------

                           Interest
                           expense, net                               (7,938)                                       (8,829)                                      (29,387)                                      (45,031)

                           Loss on early
                           extinguishment
                           of debt                                         -                                        (2,180)                                       (3,405)                                       (6,304)

                          Other, net                                    (100)                                         (147)                                         (402)                                         (458)
                                                                                                                                                                    ----                                          ----

                                                                                                        (8,038)                                      (11,156)                                      (33,194)                                      (51,793)
                                                                                                        ------                                       -------                                       -------                                       -------

                           Loss from
                           continuing
                           operations
                           before income
                           taxes                                        (963)                                      (53,604)                                      (11,998)                                     (232,652)

                           Provision
                           (benefit) for
                           income taxes                                1,902                                        (3,766)                                        5,839                                       (32,293)

                           Loss from
                           continuing
                           operations                                 (2,865)                                      (49,838)                                      (17,837)                                     (200,359)

                           Loss from
                           discontinued
                           operations net
                           of provision
                           (benefit) for
                           income taxes                              (10,433)                                      (64,211)                                      (11,398)                                      (92,462)

                          Net loss                                                                     (13,298)                                     (114,049)                                      (29,235)                                     (292,821)

                           Less: Income
                           attributable to
                           noncontrolling
                           interest                                      (31)                                         (317)                                         (976)                                       (1,195)

                           Net loss
                           attributable to
                           Willbros Group,
                           Inc.                                     $(13,329)                                    $(114,366)                                     $(30,211)                                    $(294,016)

                           Reconciliation of
                           net loss
                           attributable to
                           Willbros Group,
                           Inc.

                           Loss from
                           continuing
                           operations                                $(2,896)                                     $(50,155)                                     $(18,813)                                    $(201,554)

                           Loss from
                           discontinued
                           operations                                (10,433)                                      (64,211)                                      (11,398)                                      (92,462)

                           Net loss
                           attributable to
                           Willbros Group,
                           Inc.                                     $(13,329)                                    $(114,366)                                     $(30,211)                                    $(294,016)

                           Basic loss per
                           share
                           attributable to
                           Company
                           shareholders:

                           Continuing
                           operations                                 $(0.06)                                       $(1.05)                                       $(0.39)                                       $(4.25)

                           Discontinued
                           operations                                  (0.22)                                        (1.35)                                        (0.24)                                        (1.94)

                                                                                                        $(0.28)                                       $(2.40)                                       $(0.63)                                       $(6.19)
                                                                                                        ======                                        ======                                        ======                                        ======

                           Diluted loss per
                           share
                           attributable to
                           Company
                           shareholders:

                           Continuing
                           operations                                 $(0.06)                                       $(1.05)                                       $(0.39)                                       $(4.25)

                           Discontinued
                           operations                                  (0.22)                                        (1.35)                                       $(0.24)                                        (1.94)

                                                                                                        $(0.28)                                       $(2.40)                                       $(0.63)                                       $(6.19)
                                                                                                        ======                                        ======                                        ======                                        ======

    Cash Flow Data
    --------------

    Continuing operations

                           Cash provided by
                           (used in)

                           Operating
                           activities                                 $8,310                                        $8,981                                        $1,970                                       $67,321

                           Investing
                           activities                                  7,219                                       $18,362                                         6,881                                        51,075

                           Financing
                           activities                                 39,075                                      $(31,331)                                        7,335                                      (146,436)

                           Foreign
                           exchange
                           effects                                       (27)                                        $(196)                                       (2,137)                                         (449)

    Discontinued operations                                                                            (16,105)                                      $(6,575)                                      (23,114)                                      (49,167)

    Other Data (Continuing Operations)
    ---------------------------------

                           Weighted average
                           shares
                           outstanding

                          Basic                                                                         48,176                                        47,616                                        48,019                                        47,476

                          Diluted                                     48,176                                        47,616                                        48,019                                        47,476

                           Adjusted EBITDA
                           from continuing
                           operations(2)                             $27,934                                        $4,568                                       $81,777                                       $50,235

                           Capital
                           expenditures                                1,566                                         1,278                                        10,870                                        10,229

    Reconciliation of Non-GAAP Financial Measures:
    ----------------------------------------------

                           Operating income
                           (loss) from
                           continuing
                           operations
                           before special
                           items (1)
                          -----------------

                           Operating
                           income
                           (loss), as
                           reported                                   $7,075                                      $(42,448)                                      $21,196                                     $(180,859)

                           Goodwill
                           impairment                                  8,067                                        35,032                                         8,067                                       178,575

                           Changes in
                           fair value of
                           contingent
                           earnout
                           liability                                       -                                             -                                             -                                       (10,000)

                           Operating
                           income (loss)
                           before
                           special items                             $15,142                                       $(7,416)                                      $29,263                                      $(12,284)
                                                                     =======                                       =======                                       =======                                      ========

                           Utility T&D operating
                           income (loss) from
                           continuing
                           operations before
                           special items (1)
                          ---------------------

                           Operating
                           income
                           (loss), as
                           reported                                  $(3,320)                                      $(1,897)                                       $5,682                                     $(150,012)

                           Goodwill
                           impairment                                  8,067                                             -                                         8,067                                       143,543

                           Operating
                           income (loss)
                           before
                           special items                              $4,747                                       $(1,897)                                      $13,749                                       $(6,469)
                                                                      ======                                       =======                                       =======                                       =======

                           Net income (loss)
                           from continuing
                           operations
                           before special
                           items (1)
                          -----------------

                           Net loss from
                           continuing
                           operations,
                           as reported                               $(2,896)                                     $(50,155)                                     $(18,813)                                    $(201,554)

                           Goodwill
                           impairment                                  8,067                                        35,032                                         8,067                                       178,575

                           Changes in
                           fair value of
                           contingent
                           earnout
                           liability                                       -                                             -                                             -                                       (10,000)

                           Net income
                           (loss) from
                           continuing
                           operations
                           before
                           special items                              $5,171                                      $(15,123)                                     $(10,746)                                     $(32,979)
                                                                      ======                                      ========                                      ========                                      ========

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

                           Continuing operations before
                           special items (1)                                                             $0.11                                        $(0.32)                                       $(0.22)                                       $(0.69)

                                                                                      Three Months Ended                                Year Ended

                                                                                         December 31,                                  December 31,
                                                                                        ------------                                  ------------

                                                                                                          2012                                          2011                                          2012                                          2011
                                                                                                          ----                                          ----                                          ----                                          ----

                           Adjusted EBITDA
                           from continuing
                           operations (2)
                          ----------------

                           Net loss from
                           continuing
                           operations
                           attributable
                           to Willbros
                           Group, Inc.                               $(2,896)                                     $(50,155)                                     $(18,813)                                    $(201,554)

                           Interest
                           expense, net                                7,938                                         8,829                                        29,387                                        45,031

                           Provision
                           (benefit) for
                           income taxes                                1,902                                        (3,766)                                        5,839                                       (32,293)

                           Depreciation
                           and
                           amortization                               11,657                                        12,370                                        46,954                                        54,976

                           Loss on early
                           extinguishment
                           of debt                                         -                                        (2,180)                                        3,405                                         6,304

                           Changes in
                           fair value of
                           earn out
                           liability                                       -                                             -                                             -                                       (10,000)

                           Goodwill
                           impairment                                  8,067                                        35,032                                         8,067                                       178,575

                           DOJ monitor
                           cost                                            -                                           502                                         1,588                                         3,567

                           Stock based
                           compensation                                1,850                                         2,316                                         7,623                                         9,724

                           Restructuring
                           and
                           reorganization
                           costs                                         (18)                                           18                                           151                                           105

                           (Gains) losses
                           on sales of
                           assets                                       (597)                                        1,285                                        (3,400)                                       (5,395)

                           Noncontrolling
                           interest                                       31                                           317                                           976                                         1,195

                           Adjusted
                           EBITDA from
                           continuing
                           operations(2)                             $27,934                                        $4,568                                       $81,777                                       $50,235
                                                                     =======                                        ======                                       =======                                       =======

    Balance Sheet Data                                                                              12/31/2012                                     9/30/2012                                     6/30/2012                                     3/31/2012
    ------------------                                                                              ----------                                     ---------                                     ---------                                     ---------

                           Cash and cash
                           equivalents                               $54,380                                       $15,908                                       $38,481                                       $48,939

                          Working capital                            267,155                                       169,339                                        77,267                                       150,945

                          Total assets                               978,246                                       975,187                                       868,801                                       857,644

                          Total debt                                 303,820                                       256,799                                       227,300                                       237,318

                           Stockholders'
                           equity                                    206,333                                       218,906                                       216,404                                       211,804

    Backlog Data (3)
    ---------------

                           Total By
                           Reporting
                           Segment
                          ---------

                          Oil & Gas                                 $605,803                                      $615,609                                      $716,756                                      $678,946

                          Utility T&D                              1,274,816                                     1,221,677                                     1,269,863                                     1,297,200

                          Canada                                     349,520                                       358,581                                       362,933                                       293,061

                          Total Backlog                           $2,230,139                                    $2,195,867                                    $2,349,552                                    $2,269,207

                           Total Backlog By
                           Geographic Area
                          -----------------

                          United States                           $1,743,906                                    $1,685,255                                    $1,820,321                                    $1,794,559

                          Canada                                     349,520                                       358,581                                       362,933                                       293,061

                          Middle East                                131,969                                       145,368                                       160,060                                       174,747

                           Other
                           International                               4,744                                         6,663                                         6,238                                         6,840

                          Total Backlog                           $2,230,139                                    $2,195,867                                    $2,349,552                                    $2,269,207

                          12 Month Backlog                        $1,060,837                                    $1,013,326                                    $1,111,073                                      $930,009
                          ----------------                        ==========                                    ==========                                    ==========                                      ========

    (1)                    Operating income (loss), net income (loss) from continuing operations and basic
                           income (loss) from continuing operations before special items are non-GAAP
                           financial measures that exclude special items that management believes affect
                           the comparison of results for the periods presented.  Management also believes
                           results excluding these items are more comparable to estimates provided by
                           securities analysts and therefore are useful in evaluating operational trends
                           of the Company and its performance relative to other engineering and
                           construction companies.

                     (2)   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 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.

                     (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.

SOURCE Willbros Group, Inc.


Source: PR Newswire