HOUSTON, TX, May 10, 2010 (MARKETWIRE via COMTEX) --Willbros Group, Inc. (NYSE: WG)
-- Fayetteville Express Pipeline (FEP) project now underway
-- Backlog grows 24 percent to $484 million
-- Guidance updated to reflect deal cost
Willbros Group, Inc. (NYSE: WG) announced results for the first
quarter 2010. For the first quarter of 2010, Willbros reported a loss
from continuing operations of $13.0 million, or $0.33 per basic and
diluted share, on revenue of $137.0 million. First quarter results
were impacted by low levels of large diameter pipeline construction
activity resulting in continued low revenue and the impact of the
previously announced plan to retain key resources to execute the FEP
project which is now underway. Earnings were also impacted by
additional costs associated with high levels of bidding activity,
charges related to the DOJ monitor and the InfrastruX transaction.
Randy Harl, President and Chief Executive Officer, explained, "Our
first quarter results were impacted by expected low levels of activity
in both U.S. and Canada pipeline construction and continued margin
pressure in our Downstream segment. While we expected and
communicated a slow start to 2010, we are beginning to see the
expected significant ramp-up in the second quarter as we moved into
the construction phase on FEP and continue executing turnaround
services in our Downstream segment.
"Our short term focus is on building our backlog, which is up 24
percent over the previous quarter, rationalizing our cost structure to
address a continuing tight refining market and integrating
InfrastruX, after the expected close in the second quarter. The
combination with InfrastruX presents us with multiple cross selling
opportunities to both grow our gas infrastructure activity and expand
our integrated service offering to the electric transmission and
distribution markets. We continue to expect our contract awards to
improve throughout 2010 and we are experiencing an increase in
inquiries in our engineering units in both the Upstream and
Downstream Oil & Gas segments. We believe recent awards and rising
steel and end product prices support our view that we are at or near
the bottom of the cycle for our industry. Our diversified service
offerings and breadth of geographic market coverage should enable us
to grow both our top line and earnings going forward. Also, a key
differentiator for Willbros is our international experience and our
ability to redeploy our resources to the most attractive global
markets, including Australia, where we have bids outstanding and
prospects exceeding $3 billion."
Segment Operating Results
The Upstream Oil & Gas segment reported an operating loss for the
first quarter of $11.8 million on revenue of $76.5 million. Operating
results were impacted by costs for resources held to perform the
Fayetteville Express Pipeline project, which is now underway, a high
level of bidding activity, and, in Canada, the delay of a project
which was expected to be performed in the first quarter. Positive
performance in the oil sands region of Canada and services in Oman
partially offset the costs incurred in North America pipeline
construction. The Downstream Oil & Gas segment reported an operating
loss of $9.0 million on revenue of $60.5 million. The Downstream
segment continues to experience delays to previously booked
maintenance activities and an absence of capital projects. In the
first quarter of 2010, the Government Services unit has won new
assignments and tank services won its first API storage tank project
in Canada.
Backlog(3)
At March 31, 2010, Willbros reported backlog from continuing
operations of $484.4 million compared to $391.7 million at December
31, 2009; approximately 44 percent of backlog was recurring services
contracts.
InfrastruX Acquisition
The InfrastruX acquisition is anticipated to close in the second
quarter. Willbros management believes the combination with InfrastruX
will accelerate growth objectives and improve visibility due to a high
level of recurring services, increased diversity and cross-selling
opportunities. Randy Harl, President and Chief Executive Officer,
explained, "InfrastruX generates about 70 percent of its revenue
from master service agreements (MSA's), and these agreements are the
product of long and deep relationships of over 50 years with certain
customers. In addition to the recurring annual revenue generated by
MSA's, bid work for these same customers also benefits from a high
win rate due to familiarity with their systems and requirements, and
knowledge of execution costs on their systems. We also believe the
opportunity to gain scale and capability for the anticipated increase
in construction of electric transmission projects through leveraging
the Texas Competitive Renewable Energy Zones ("CREZ" a large electric
transmission project) assignments for Oncor is analogous to our
recent experience developing large diameter pipeline construction
capability in the period prior to 2008 to prepare for the robust
build-out of pipeline infrastructure. This should position us, in
combination with our project management and engineering skill sets,
to competitively address the anticipated $50 billion market for large
electric transmission projects. Additionally, InfrastruX's
Pittsburgh-based operations position us to deliver our combined
service capability to address the developing Marcellus Shale and
further support our alliance agreement with NiSource. The pending
acquisition of InfrastruX is a result of the implementation of our
strategy which we have been communicating over the past three years."
Guidance
Van Welch, Chief Financial Officer, updated earnings guidance for
2010: "In our March earnings call, we projected Willbros annualized
revenue between $1.0 billion to $1.2 billion, with associated
annualized earnings between $0.40 and $0.50 cents per diluted share
which excluded any InfrastruX deal cost. We now estimate deal cost of
$4 million prior to closing and therefore adjust our guidance on
annualized earnings to a range of $0.35 to $0.45 per diluted share."
Conference Call
In conjunction with this release, Willbros has scheduled a conference
call, which will be broadcast live over the Internet on Tuesday, May
11, 2010 at 9:00 a.m. Eastern Time (8:00 a.m. Central).
What: Willbros Group, Inc. First Quarter 2010 Earnings Conference Call
When: Tuesday, May 11, 2010 - 9:00 a.m. Eastern Time
Where: Live via phone by dialing 888-218-8176 or 913-312-0392,
passcode 4848212, and asking for the Willbros call at least
10 minutes prior to the start time.
Where: Live over the Internet by logging onto www.willbros.com on the
home page under Events.
A telephonic replay of the conference call will be available through
May 25, 2010 and may be accessed by calling 888-203-1112 or
719-457-0820 and using the passcode 4848212. 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 the potential for
additional investigations; the disruptions to the global credit
markets; the current global recession; fines and penalties by
government agencies; 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 possible losses arising from the
discontinuation of operations and the sale of the Nigeria assets; the
existence of material weaknesses in internal controls 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; the refinery crack spread and planned refinery
outages and upgrades; the effective tax rate of the different
countries where the work is being conducted; and development trends
of the oil, gas, power, refining and petrochemical industries;
changes in the political and economic environment of the countries in
which the Company has operations; 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.
TABLE TO FOLLOW
WILLBROS GROUP, INC.
(In thousands, except per share amounts)
Three Months Ended
March 31
----------------------
2010 2009
---------- ----------
Income Statement
Contract revenue
Upstream O&G $ 76,501 $ 388,489
Downstream O&G 60,495 75,437
---------- ----------
136,996 463,926
Operating expenses
Upstream O&G 88,267 362,234
Downstream O&G 69,511 75,597
---------- ----------
157,778 437,831
Operating income (loss)
Upstream O&G (11,766) 26,255
Downstream O&G (9,016) (160)
---------- ----------
Operating income (loss) (20,782) 26,095
Other expense
Interest - net (2,107) (2,104)
Other - net 1,971 325
---------- ----------
(136) (1,779)
---------- ----------
Income (loss) from continuing operations before
income taxes (20,918) 24,316
Provision (benefit) for income taxes (8,140) 8,240
---------- ----------
Income (loss) from continuing operations (12,778) 16,076
Income (loss) from discontinued operations net of
provision for income taxes (270) 160
---------- ----------
Net income (loss) (13,048) 16,236
Less: Income attributable to noncontrolling
interest (256) (747)
---------- ----------
Net income (loss) attributable to Willbros Group,
Inc. $ (13,304) $ 15,489
========== ==========
Reconciliation of net income (loss) attributable
to Willbros Group, Inc.
Income (loss) from continuing operations $ (13,034) $ 15,329
Income (loss) from discontinued operations (270) 160
---------- ----------
Net income (loss) attributable to Willbros Group,
Inc. $ (13,304) $ 15,489
========== ==========
Basic income (loss) per share attributable to
Company shareholders:
Continuing operations $ (0.33) $ 0.40
Discontinued operations (0.01) -
---------- ----------
$ (0.34) $ 0.40
========== ==========
Diluted income (loss) per share attributable to
Company shareholders:
Continuing operations $ (0.33) $ 0.39
Discontinued operations (0.01) -
---------- ----------
$ (0.34) $ 0.39
========== ==========
Cash Flow Data
Continuing operations
Cash provided by (used in)
Operating activities $ (255) $ 57,103
Investing activities (3,112) (3,140)
Financing activities (5,378) (6,827)
Foreign exchange effects 843 (639)
Discontinued operations (33) 1,201
Other Data (Continuing Operations)
Weighted average shares outstanding
Basic 38,942 38,564
Diluted 38,942 43,552
EBITDA(1) $ (10,594) $ 36,902
Capital expenditures 5,805 3,185
Reconciliation of Non-GAAP Financial Measure
EBITDA (1), (2)
Net income (loss) from continuing operations
attributable to Willbros Group, Inc. $ (13,034) $ 15,329
Interest - net 2,107 2,104
Provision (benefit) for income taxes (8,140) 8,240
Depreciation and amortization 8,473 11,229
---------- ----------
EBITDA (10,594) 36,902
========== ==========
Stock based compensation 2,010 3,675
Restructuring and reorganization costs (181) 4,834
Acquisition related costs 796 93
(Gains) losses on sales of equipment (1,605) (26)
DOJ monitor costs 3,324 -
---------- ----------
Adjusted EBITDA (2) $ (6,250) $ 45,478
========== ==========
Balance Sheet Data 3/31/2010 12/31/2009
---------- ----------
Cash and cash equivalents $ 190,839 $ 198,774
Working capital 231,852 297,294
Total assets 720,317 728,378
Total debt 112,769 104,037
Stockholders' equity 477,808 487,196
Backlog Data (3)
By Reporting Segment
Upstream O&G $ 351,900 $ 245,586
Downstream O&G 132,483 146,156
---------- ----------
$ 484,383 $ 391,742
========== ==========
By Geographic Area
North America $ 436,058 $ 368,447
Middle East & North Africa 48,325 23,295
---------- ----------
$ 484,383 $ 391,742
========== ==========
(1) EBITDA is earnings before net interest, income taxes and depreciation
and amortization and intangible asset impairments. EBITDA as presented may
not be comparable to other similarly titled measures reported by other
companies. The Company believes EBITDA is a useful measure of evaluating
its financial performance because of its focus on the Company's results
from operations before net interest, income taxes, depreciation and
amortization. EBITDA is not a measure of financial performance under
generally accepted accounting principles. However, EBITDA is a common
alternative measure of operating performance used by investors, financial
analysts and rating agencies. A reconciliation of EBITDA to net income is
included in the exhibit to this release.
(2) Adjusted EBITDA is defined as earnings before net interest, income
taxes and depreciation and amortization and intangible asset impairments,
as adjusted for other items that management considers to be non-recurring,
unusual or not indicative of our core operating performance. Management
uses Adjusted EBITDA for comparing normalized operating results with
corresponding historical periods and with the operational performance of
other companies in our industry and presentations made to our analysts,
investment banks and other members of the financing community who use this
information in order to make investing decisions about us. Most of the
adjustments reflected in Adjusted EBITDA are also included in performance
metrics under our credit facilities and other financing arrangements.
However, Adjusted EBITDA is not a financial measurement recognized under
U.S. generally accepted accounting principles. Because not all companies
use identical calculations, our presentation of Adjusted EBITDA may not be
comparable to similarly titled measures of other companies.
(3) Backlog is anticipated contract revenue from projects for which award
is either in hand or reasonably assured.
CONTACT:
Michael W. Collier
Vice President Investor Relations
Sales & Marketing
Willbros
713-403-8038
Connie Dever
Director Strategic Planning
Willbros
713-403-8035
SOURCE: Willbros Group, Inc.
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