Market Overview

Willbros Reports First Quarter 2018 Results

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  • Definitive proxy statement filed May 2, 2018
  • Special Meeting of Stockholders scheduled for May 31, 2018
  • Process to finalize merger remains on schedule                                                                                                                      

HOUSTON, May 09, 2018 (GLOBE NEWSWIRE) -- Willbros Group, Inc. (OTC:WGRP) today announced financial results for the first quarter of 2018. The Company reported a net loss of $17.0 million, or $(0.27) per diluted share, in the first quarter of 2018 on revenue of $201.0 million, compared to a net loss of $17.8 million, or $(0.29) per diluted share, in the first quarter of 2017 on revenue of $163.9 million.

An operating loss of $10.5 million in the first quarter of 2018 compares to an operating loss of $14.9 million in the first quarter of 2017. Included in the first quarter of 2018 operating loss are $8.4 million of other charges, primarily related to professional fees associated with evaluating various strategic alternatives, including negotiation of the pending transaction with Primoris Services Corporation. Also included in the first quarter of 2018 operating loss are $6.1 million of gains on the sale of assets, primarily related to the previously announced sales of the mainline pipeline construction assets and the tank services business.

Michael Fournier, President and CEO, commented, "Integration planning with Primoris has commenced and we are focused on finalizing the transaction. The special meeting of stockholders is scheduled for May 31, 2018 and, assuming transaction approval is obtained, completion of the merger will occur quickly."

Backlog

Twelve-month backlog of $425.3 million at March 31, 2018 decreased $51.9 million, or approximately 11% from December 31, 2017, primarily due to a significant reduction in the Oil & Gas segment backlog resulting from work completed on the mainline pipeline and facility construction projects.  Both the Utility T&D and Canada segments reported an increase in twelve-month backlog at March 31, 2018 compared to December 31, 2017.

Total backlog of $635.4 million at March 31, 2018 increased $19.0 million from December 31, 2017, with all of the increase attributable to the Utility T&D segment.

Segment Operating Results

Utility T&D

The Utility T&D segment reported revenue of $112.6 million for the first quarter of 2018, a $2.9 million decrease compared to the first quarter of 2017The segment reported operating income of $1.9 million in the first quarter of 2018 compared to operating income of $0.8 million in the first quarter of 2017. The higher operating income was generated by improved margins in the electric transmission business due to productivity gains and greater equipment utilization, coupled with margin improvement in the expanding WTD Southeast distribution business due to revenue growth. These improvements were partially offset by margin deterioration in the WTD East distribution business due to a reduction in volume and lengthy weather delays on existing projects.

Oil & Gas

For the first quarter of 2018, the Oil & Gas segment reported revenue of $62.6 million and operating income of $1.0 million, an $8.3 million increase in operating income from the first quarter of 2017 when this segment generated $22.4 million in revenue. The improvement in operating income was primarily due to a gain on asset sales of $5.5 million, an increase in the utilization of equipment and a reduction of operating losses associated with our mainline pipeline and integrity construction businesses.  

Canada

Canada revenue of $25.8 million for the first quarter of 2018 was relatively flat when compared to the first quarter of 2017. The segment reported an operating loss of $0.9 million in the first quarter of 2018 compared to an operating loss of $3.3 million in the first quarter of 2017. This improvement in operating income was primarily driven by a higher volume of maintenance work and specialty fabrication projects.

Liquidity

Total liquidity at March 31, 2018 was $21.4 million which represents only unrestricted cash and cash equivalents. In March 2018, we entered into forbearance agreements with our lenders as a result of noncompliance with certain provisions of our term and ABL credit agreements. The forbearance agreements provide that our lenders will refrain from pursuing any remedies with respect to certain events of default under our credit agreements for a limited period as we work to complete the merger transaction and provided we comply with the provisions of the agreements. The ABL forbearance agreement also prohibits the company from borrowing additional funds under its existing ABL credit facility. At March 31, 2018, borrowings under the ABL credit facility totaled $23.0 million. On March 30, 2018, an additional $10 million loan was provided under the term credit agreement by Primoris. The Primoris loan is repayable if the transaction does not close.

Total liquidity was $48.8 million at December 31, 2017, consisting of $33.5 million of unrestricted cash and revolver availability of $15.3 million. This significant reduction in liquidity during the first quarter of 2018 was primarily due to the operating losses incurred in the fourth quarter of 2017 and first quarter of 2018 and our inability to access the revolver under the ABL forbearance agreement.

Conference Call

As a result of Willbros' pending transaction with Primoris Services Corporation, the company will not hold a conference call to discuss its first quarter of 2018 results.

About Willbros
Willbros is a specialty energy infrastructure contractor serving the oil and gas and power industries with offerings that primarily include construction, maintenance and facilities development services. For more information on Willbros, please visit our web site at www.willbros.com.

This announcement contains forward-looking statements. All statements, other than statements of historical facts, which address activities, events or developments the company expects or anticipates will or may occur in the future, are forward-looking statements.  A number of risks and uncertainties could cause actual results to differ materially from these statements, including the company's stockholders may not approve the merger transaction; the conditions to the completion of the transaction may not be satisfied, or any regulatory approvals required for the transaction may not be obtained on the terms expected, on the anticipated schedule, or at all; closing of the transaction may not occur or may be delayed, either as a result of litigation related to the transaction or otherwise; the parties may be unable to achieve the anticipated benefits of the transaction; completing the merger may distract the company's management from other important matters; inability to obtain additional waivers, amendments or other forbearance under the company's existing loan agreements; inability to achieve anticipated margins on fixed price contracts; unanticipated accounting or other issues regarding any material weaknesses in internal control over financial reporting; 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; the existence of other material weaknesses in internal control over financial reporting; contract and billing disputes; availability of quality management; availability and terms of capital; changes in, or the failure to comply with, government regulations; the promulgation, application, and interpretation of environmental laws and regulations; future E&P capital expenditures; oil, gas, gas liquids, and power prices and demand; the amount and location of planned pipelines; development trends of the oil and gas, and power industries; as well as other risk factors described from time to time in the company's documents and reports filed with the SEC.  The company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

SCHEDULES TO FOLLOW

                 
WILLBROS GROUP, INC.    
(In thousands, except per share amounts)    
                       
     Three Months Ended         
     March 31,         
            2018       2017          
Income Statement                 
  Contract revenue                
    Utility T&D   $   112,612     $   115,508          
    Canada       25,803         25,960          
    Oil & Gas       62,639         22,432          
    Eliminations       (74 )       -           
              200,980         163,900          
                       
  Operating expenses                
    Utility T&D       110,704         114,724          
    Canada       26,653         29,300          
    Oil & Gas       61,636         29,768          
    Corporate       12,534         4,961          
    Eliminations       (74 )       -           
              211,453         178,753          
                       
  Operating income (loss)                
    Utility T&D       1,908         784          
    Canada       (850 )       (3,340 )        
    Oil & Gas       1,003         (7,336 )        
    Corporate       (12,534 )       (4,961 )        
  Operating loss       (10,473 )       (14,853 )        
                       
  Non-operating expenses                
    Interest expense       (6,528 )       (3,488 )        
    Interest income       8         8          
    Other, net       37         (3 )        
              (6,483 )       (3,483 )        
  Loss from continuing operations before income taxes       (16,956 )       (18,336 )        
  Benefit for income taxes       (221 )       (600 )        
  Loss from continuing operations       (16,735 )       (17,736 )        
  Loss from discontinued operations net of provision for income taxes       (230 )       (31 )        
  Net loss     $   (16,965 )   $   (17,767 )        
                       
  Basic loss per share attributable to Company shareholders:                
    Continuing operations   $   (0.27 )   $   (0.29 )        
    Discontinued operations       -          -           
          $   (0.27 )   $   (0.29 )        
                       
  Diluted loss per share attributable to Company shareholders:                
    Continuing operations   $   (0.27 )   $   (0.29 )        
    Discontinued operations       -          -           
          $   (0.27 )   $   (0.29 )        
                       
Cash Flow Data                
Continuing operations                
  Cash provided by (used in)                
    Operating activities   $   (25,939 )   $   (3,685 )        
    Investing activities       9,963         1,551          
    Financing activities       4,517         (2,454 )        
    Foreign exchange effects       (139 )       86          
Discontinued operations       (404 )       (240 )        
                       
Other Data (Continuing Operations)                
  Weighted average shares outstanding                
    Basic         62,405         61,830          
    Diluted       62,405         61,830          
  Adjusted EBITDA from continuing operations(1)   $   (3,347 )   $   (9,012 )        
  Purchases of property, plant and equipment       385         493          
                       
Reconciliation of Non-GAAP Financial Measures                
                       
  Adjusted EBITDA from continuing operations (1)                
    Loss from continuing operations   $   (16,735 )   $   (17,736 )        
    Interest expense       6,528         3,488          
    Interest income       (8 )       (8 )        
    Benefit for income taxes       (221 )       (600 )        
    Depreciation and amortization       4,315         5,037          
    Stock based compensation       524         906          
    Legal and consulting costs       7,384         274          
    Restructuring related costs       946         323          
    Gain on sale of assets       (6,080 )       (696 )        
    Adjusted EBITDA from continuing operations(1)   $   (3,347 )   $   (9,012 )        
                       
                       
Balance Sheet Data   March 31,
2018
  December 31,
2017
       
  Cash and cash equivalents   $   21,364     $   33,472          
  Working capital       (92,364 )       (83,884 )        
  Total assets       349,039         363,877          
  Total debt       139,902         133,283          
  Stockholders' equity       15,173         31,708          
                       
Backlog Data (2)                
  12 Month Backlog by Reporting Segment                
    Utility T&D   $   321,131     $   307,122          
    Canada       55,081         51,714          
    Oil & Gas       49,042         118,278          
  12 Month Backlog   $   425,254     $   477,114          
                       
  12 Month Backlog exclusive of Tank Services & Mainline Pipeline Construction Services                
  12 Month Backlog, as reported   $   425,254     $   477,114          
  Mainline Pipeline Construction Services 12 Month Backlog       9,053         20,734          
  Tank Services 12 Month Backlog       1,317         18,258          
  12 Month Backlog, exclusive of Tank Services and Mainline Pipeline Construction Services   $   414,884     $   438,122          
                       
  Total Backlog By Reporting Segment                
    Utility T&D   $   489,351     $   387,284          
    Canada       96,970         110,770          
    Oil & Gas       49,042         118,278          
  Total Backlog   $   635,363     $   616,332          
                       
  Total Backlog exclusive of Tank Services & Mainline Pipeline Construction Services                
  Total Backlog, as reported   $   635,363     $   616,332          
  Mainline Pipeline Construction Services Total Backlog       9,053         20,734          
  Tank Services Total Backlog       1,317         18,258          
  Total Month Backlog, exclusive of Tank Services and Mainline Pipeline Construction Services   $   624,993     $   577,340          
                       
(1)








  Adjusted EBITDA from continuing operations is defined as income (loss) from continuing operations before interest expense (income), 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.
       
               


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