Exhibit 99.1
FINAL
Willbros Reports First Quarter 2015 Results
| | • | | Total Liquidity at March 31, 2015 is $100.1 million |
| | • | | Operating income of $35.2 million, including gain on asset sales of $58.5 million |
| | • | | Weather and market conditions slowed operations in first quarter |
| | • | | Company expects additional cost savings from focus on core services |
| | • | | Company to host conference call at 8:00 AM Central Time, May 6, 2015 |
HOUSTON, TX, MAY 5, 2015 —Willbros Group, Inc. (NYSE: WG) announced today results for the first quarter 2015. The Company reported a net loss in the first quarter of $9.8 million, or $0.20 per share, on revenue of $346.9 million, compared to a net loss of $25.0 million, or $0.51 per share, on revenue of $476.5 million for the same period in 2014. First quarter 2015 operating income was $35.2 million compared to an operating loss of $5.6 million in 2014. The first quarter results included a $58.5 million, or $1.18 per share, gain on the sale of subsidiaries, and debt covenant suspension and extinguishment charges of $35.9 million, or $0.72 per share, associated with the early payment of term loan debt and the suspension of debt covenants through March 31, 2016, as well as other charges of $4.0 million including asset impairment, lease abandonment and employee severance expenses.
John T. McNabb, II, Chairman and Chief Executive Officer, commented, “The first quarter results reflect the gains on asset sales we completed in order to reduce debt as well as the cost of the negotiated covenant relief discussed in our last call. Our operating results were negatively impacted by lower revenue in ourOil & Gas andCanada segments as well as weather and market conditions. We are continuing to reshape Willbros to align our businesses with the revenue opportunities we believe we can continue to bid, win and execute. There is more to do, and we expect to realize additional cost savings in the second quarter. We also will continue to pursue sales of discrete assets. Our reduced backlog is due mainly to the sale of two non-strategic businesses. With the amendments to our credit facility in place and our improved liquidity, we are seeing improving bidding opportunities. With cost discipline and good project execution, we believe we can have substantial improvement in the last half of 2015 and enter 2016 with positive operating performance.”
Backlog(2)
At March 31, 2015, Willbros reported total backlog of approximately $1.2 billion and 12 month backlog of $0.6 billion. In comparison to December 31, 2014, total backlog decreased approximately $196.5 million and 12 month backlog decreased approximately $140.0 million. Approximately $137.5 million and $87.1 million in total and 12 month backlog, respectively, is attributable to the sale of the UtilX and Premier subsidiaries in the first quarter of 2015. The remaining decreases were primarily related to the work-off of
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 | | 1 of 4 CONTACT: Michael W. Collier SVP Investor Relations Marketing & Communications Willbros 713-403-8038 |
projects in theCanada andProfessional Services segments and the continued work-off of Master Service Agreements, which are subject to renewal options in future years, outweighing any additions to backlog for the year.
Segment Operating Results
Oil & Gas
For the first quarter of 2015, theOil & Gas segment generated revenue of $76.4 million and an operating loss of $11.0 million, an improvement of $10.0 million from the first quarter of 2014, when this segment generated $177.5 million in revenue. The first quarter 2015 results, although impacted by lower revenues, improved primarily due to the absence of loss projects and strong performance by facilities and integrity construction services compared to the first quarter of 2014.
Utility T&D
For the first quarter of 2015, theUtility T&D segment reported an operating loss of $4.9 million on revenue of $87.0 million compared to operating income of $0.4 million on revenue of $83.5 million in the first quarter of 2014. The loss of $4.9 million is primarily attributed to an 11 percent decrease in transmission construction activity, which carries higher margins than maintenance work.UT&D also experienced a reduction in activity in environmental and matting services relative to 2014. Greater than anticipated inclement weather also negatively impacted operations in the West and along the Atlantic seaboard.
Canada
For the first quarter of 2015, theCanada segment reported an operating loss of $1.5 million on revenue of $87.0 million, compared to operating income of $13.3 million on revenue of $117.1 million in 2014. The decrease in revenue from 2014 is attributed to fewer capital projects and a contraction in the level of construction and maintenance activities by customers in response to low oil prices.
Professional Services
TheProfessional Services segment reported an operating loss of $6.0 million on revenue of $100.1 million in the first quarter of 2015 compared to operating income of $1.7 million on revenue of $100.1 million in the first quarter of 2014. First quarter of 2015 results in this segment were related to increased losses in the UtilX and Premier businesses that were sold during the quarter. These two businesses contributed $148.8 million of revenue in 2014 and $27.2 million in the first quarter 2015.Professional Services also was impacted by lower utilization in EPC services in the upstream market.
Outlook
The decline in crude oil prices, combined with the drop in the rig count and the reduced capital budgets of
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| | 2 of 4 CONTACT: Michael W. Collier SVP Investor Relations Marketing & Communications Willbros 713-403-8038 |
producers and transporters, continues to impact the company’s customers, markets and outlook. The Company expects oil prices to remain flat to slightly higher for the next twelve months and is continuing to examine and adjust its operations to reduce general and administrative costs and the indirect costs required to support its service lines. The Company believes proposal and bidding levels in theOil & Gas andCanada segments support the expectation of higher levels of construction activity in the second half of 2015 and into 2016, with most of the identified larger opportunities for these two segments scheduled for the 2016 timeframe and beyond. Willbros believes the natural gas markets will provide more demand for itsProfessional Services andOil & Gas services in 2016. The outlook for the mainline pipeline construction business, as well as associated facilities and pipeline integrity work, is expected to improve in the second half of 2015 and into 2016. The Company believes its business in Canada will generate positive operating results going forward and is highly confident it will book additional backlog in that market. TheProfessional Services segment is experiencing what the Company believes is a short term decline in its mid-stream engineering activities, but the Company expects larger, natural gas driven opportunities in the 2016 timeframe. TheUtility T&D segment is now positioned in ten states with MSA’s and work crews. Favorable weather entering the Spring construction season is expected to result in improving performance for this segment and increased transmission construction opportunities. Additional backlog in the Atlantic seaboard markets continues to signal long term growth opportunities for the region, including opportunities associated with the overhead to underground project in Virginia.
Liquidity
Total liquidity (defined as cash and cash equivalents plus revolver availability) was $100.1 million at March 31, 2015. The Company had $39.0 million of cash and cash equivalents. There were no revolver borrowings.
Guidance
Van Welch, Willbros Chief Financial Officer, commented, “We now expect annual revenue to range from $1.3 to $1.5 billion in 2015. As we continue to reshape Willbros and our cost reduction initiatives take hold, we expect our operating results (excluding gains from the sale of assets) to improve significantly in the second quarter.”
Conference Call
In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet, on Wednesday, May 6, 2015 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time).
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| What: | | Willbros First Quarter 2015 Earnings Conference Call |
| When: | | Wednesday, May 6, 2015 - 9:00 a.m. Eastern Time |
| How: | | Live via phone - By dialing 877-404-9648 or 412-902-0030 a few minutes prior to the start time and asking for the Willbros’ call. Or live over the Internet by logging on to the web address below. |
| Where: | | http://www.willbros.com. The webcast can be accessed from the investor relations home page. |
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| | 3 of 4 CONTACT: Michael W. Collier SVP Investor Relations Marketing & Communications Willbros 713-403-8038 |
For those who cannot listen to the live call, a replay will be available through May 13, 2015 and may be accessed by calling 877-660-6853 or 201-612-7415 using pass code 13608887#. 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), maintenance, facilities development and operations services. For more information on Willbros, please visit our web site atwww.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 those in the Outlook and Guidance sections above. A number of risks and uncertainties could cause actual results to differ materially from these statements, including unanticipated accounting or other issues regarding any material weaknesses in internal control over financial reporting; inability of the Company or its independent auditor to confirm relevant information or data; unanticipated issues that prevent or delay the Company’s independent auditor from completing its review of financial statements or that require additional efforts, procedures or review; the untimely filing of financial statements; pending and potential investigations and lawsuits; the identification of one or more issues that require restatement of one or more other prior period financial statements; ability to remain in compliance with, or obtain waivers under, the Company’s existing loan agreements; ability to dispose of businesses and assets in a timely manner at reasonable valuations; the existence of other material weaknesses in internal control over financial reporting; contract and billing disputes; new legislation or regulations detrimental to the economic operation of refining capacity in the United States; availability of quality management; availability and terms of capital; changes in, or the failure to comply with, government regulations; the promulgation, application, and interpretation of environmental laws and regulations; future E&P capital expenditures; oil, gas, gas liquids, and power prices and demand; the amount and location of planned pipelines; poor refinery crack spreads; delay of planned refinery outages and upgrades and development trends of the oil, gas, power, refining and petrochemical industries; as well as other risk factors described from time to time in the Company’s documents and reports filed with the SEC. The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
TABLE TO FOLLOW
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| | 4 of 4 CONTACT: Michael W. Collier SVP Investor Relations Marketing & Communications Willbros 713-403-8038 |
WILLBROS GROUP, INC.
(In thousands, except per share amounts)
| | | | | | | | |
| | | Three Months Ended
March 31, | |
| | | 2015 | | | 2014 | |
Income Statement | | | | | | | | |
Contract revenue | | | | | | | | |
Oil & Gas | | $ | 76,440 | | | $ | 177,529 | |
Utility T&D | | | 86,986 | | | | 83,521 | |
Canada | | | 87,009 | | | | 117,079 | |
Professional Services(3) | | | 100,141 | | | | 100,095 | |
Eliminations | | | (3,644 | ) | | | (1,686 | ) |
| | | | | | | | |
| | | 346,932 | | | | 476,538 | |
| | |
Operating expenses | | | | | | | | |
Oil & Gas | | | 87,415 | | | | 198,541 | |
Utility T&D | | | 91,846 | | | | 83,107 | |
Canada | | | 88,524 | | | | 103,808 | |
Professional Services | | | 106,179 | | | | 98,417 | |
Gain on sale of subsidiaries | | | (58,549 | ) | | | — | |
Eliminations | | | (3,644 | ) | | | (1,686 | ) |
| | | | | | | | |
| | | 311,771 | | | | 482,187 | |
| | |
Operating income (loss) | | | | | | | | |
Oil & Gas | | | (10,975 | ) | | | (21,012 | ) |
Utility T&D | | | (4,860 | ) | | | 414 | |
Canada | | | (1,515 | ) | | | 13,271 | |
Professional Services(4) | | | (6,038 | ) | | | 1,678 | |
Gain on sale of subsidiaries | | | 58,549 | | | | — | |
| | | | | | | | |
Operating income (loss) | | | 35,161 | | | | (5,649 | ) |
| | |
Non-operating expenses | | | | | | | | |
Interest expense, net | | | (8,296 | ) | | | (7,718 | ) |
Debt covenant suspension and extinguishment charges | | | (35,869 | ) | | | — | |
Other, net | | | (110 | ) | | | 40 | |
| | | | | | | | |
| | | (44,275 | ) | | | (7,678 | ) |
| | | | | | | | |
Loss from continuing operations before income taxes | | | (9,114 | ) | | | (13,327 | ) |
Provision for income taxes | | | 317 | | | | 3,669 | |
| | | | | | | | |
Loss from continuing operations | | | (9,431 | ) | | | (16,996 | ) |
Loss from discontinued operations net of provision for income taxes | | | (393 | ) | | | (7,994 | ) |
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Net loss | | $ | (9,824 | ) | | $ | (24,990 | ) |
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Basic loss per share attributable to Company shareholders: | | | | | | | | |
Continuing operations | | $ | (0.19 | ) | | $ | (0.35 | ) |
Discontinued operations | | | (0.01 | ) | | | (0.16 | ) |
| | | | | | | | |
| | $ | (0.20 | ) | | $ | (0.51 | ) |
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Diluted loss per share attributable to Company shareholders: | | | | | | | | |
Continuing operations | | $ | (0.19 | ) | | $ | (0.35 | ) |
Discontinued operations | | | (0.01 | ) | | | (0.16 | ) |
| | | | | | | | |
| | $ | (0.20 | ) | | $ | (0.51 | ) |
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Cash Flow Data | | | | | | | | |
Continuing operations | | | | | | | | |
Cash provided by (used in) | | | | | | | | |
Operating activities | | $ | (3,894 | ) | | $ | (286 | ) |
Investing activities | | | 84,553 | | | | 19,259 | |
Financing activities | | | (64,623 | ) | | | (23,160 | ) |
Foreign exchange effects | | | (834 | ) | | | (823 | ) |
Discontinued operations | | | 513 | | | | 15,277 | |
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Other Data (Continuing Operations) | | | | | | | | |
Weighted average shares outstanding | | | | | | | | |
Basic | | | 49,819 | | | | 48,847 | |
Diluted | | | 49,819 | | | | 48,847 | |
Adjusted EBITDA from continuing operations(1) | | $ | (9,563 | ) | | $ | 5,012 | |
Purchases of property, plant and equipment | | | 1,641 | | | | 3,635 | |
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Reconciliation of Non-GAAP Financial Measure | | | | | | | | |
| | |
Adjusted EBITDA from continuing operations(1) | | | | | | | | |
Loss from continuing operations | | $ | (9,431 | ) | | $ | (16,996 | ) |
Interest expense, net | | | 8,296 | | | | 7,718 | |
Provision for income taxes | | | 317 | | | | 3,669 | |
Depreciation and amortization | | | 8,619 | | | | 9,164 | |
Impairment of long-lived asset | | | 1,979 | | | | — | |
Debt covenant suspension and extinguishment charges | | | 35,869 | | | | — | |
Stock based compensation | | | 1,918 | | | | 2,479 | |
Restructuring and reorganization costs | | | 1,223 | | | | 220 | |
Accounting and legal fees associated with the restatements | | | 476 | | | | — | |
Gain on sale of subsidiaries | | | (58,549 | ) | | | — | |
Gain on disposal of property and equipment | | | (280 | ) | | | (1,242 | ) |
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Adjusted EBITDA from continuing operations(5) | | $ | (9,563 | ) | | $ | 5,012 | |
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| | | | | | | | |
| | | 3/31/2015 | | | 12/31/2014 | |
Balance Sheet Data | | | | | | | | |
Cash and cash equivalents | | $ | 38,988 | | | $ | 23,273 | |
Working capital | | | 189,246 | | | | 205,702 | |
Total assets | | | 613,203 | | | | 692,207 | |
Total debt | | | 223,777 | | | | 289,030 | |
Stockholders’ equity | | | 134,353 | | | | 113,825 | |
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Backlog Data(2) | | | | | | | | |
Total By Reporting Segment | | | | | | | | |
Oil & Gas | | $ | 94,903 | | | $ | 109,840 | |
Utility T&D | | | 795,492 | | | | 803,392 | |
Canada | | | 167,904 | | | | 188,508 | |
Professional Services | | | 97,536 | | | | 250,574 | |
| | | | | | | | |
Total Backlog | | $ | 1,155,835 | | | $ | 1,352,314 | (6) |
| | | | | | | | |
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Total Backlog By Geographic Area | | | | | | | | |
United States | | $ | 985,905 | | | $ | 1,161,543 | |
Canada | | | 167,904 | | | | 188,508 | |
Other International | | | 2,026 | | | | 2,263 | |
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Total Backlog | | $ | 1,155,835 | | | $ | 1,352,314 | (6) |
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| | | | | | | | |
| | | | | | | | |
12 Month Backlog | | $ | 599,629 | | | $ | 739,674 | (7) |
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| (1) | Adjusted EBITDA from continuing operations is defined as income (loss) from continuing operations before interest expense, income tax expense (benefit) and depreciation and amortization, adjusted for items broadly consisting of selected items which management does not consider representative of our ongoing operations and certain non-cash items of the Company. Management uses Adjusted EBITDA from continuing operations as a supplemental performance measure for comparing normalized operating results with corresponding historical periods and with the operational performance of other companies in our industry and for presentations made to analysts, investment banks and other members of the financial community who use this information in order to make investment decisions about us. |
Adjusted EBITDA from continuing operations is not a financial measurement recognized under U.S. generally accepted accounting principles, or U.S. GAAP. When analyzing our operating performance, investors should use Adjusted EBITDA from continuing operations in addition to, and not as an alternative for, net income, operating income, or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. Because all companies do not use identical calculations, our presentation of Adjusted EBITDA from continuing operations may be different from similarly titled measures of other companies.
| (2) | Backlog is anticipated contract revenue from uncompleted portions of existing contracts and contracts whose award is reasonably assured. Master Service Agreement (“MSA”) backlog is estimated for the remaining term of the contract. MSA backlog is determined based on historical trends inherent in the MSAs, factoring in seasonal demand and projecting customer needs based on ongoing communications. Backlog is not a term recognized under U.S. GAAP; however, it is a common measurement used in our industry. |
| (3) | Includes $27.2 million and $30.0 million of revenue in the first quarter of 2015 and 2014, respectively, related to UtilX and Premier, which were sold in the first quarter of 2015. |
| (4) | Includes $3.1 million and $0.1 million of operating loss, exclusive of allocated segment and corporate general administrative costs, in the first quarter of 2015 and 2014, respectively, related to UtilX and Premier, which were sold in the first quarter of 2015. |
| (5) | Includes $(2.5) million and $0.6 million of EBITDA in the first quarter of 2015 and 2014, respectively, related to UtilX and Premier, which were sold in the first quarter of 2015. |
| (6) | Includes $137.5 million of total backlog related to UtilX and Premier, which were sold in the first quarter of 2015. |
| (7) | Includes $87.1 million of 12 month backlog related to UtilX and Premier, which were sold in the first quarter of 2015. |
