EXHIBIT 99
WILLBROS GROUP, INC. [WILLBROS GROUP, INC. LOGO]
NEWS RELEASE CONTACT: Michael W. Collier
FOR IMMEDIATE RELEASE Investor Relations Manager
Willbros USA, Inc.
(713) 403-8016
WILLBROS REPORTS FIRST QUARTER 2003 RESULTS
May 7, 2003 - HOUSTON, TEXAS - Willbros (NYSE: WG) today reported a
first quarter 2003 loss of $0.22 per fully diluted share on $98.9 million of
revenue, in line with the guidance it provided on April 23, 2003.
Revenue in the first quarter of 2003 was $98.9 million compared to
$147.5 million during the first quarter of 2002. The 33 percent decline in
revenue was the result of a combination of factors including a weak market for
pipeline-related services and the impact of inclement weather in North America,
social unrest in Nigeria and Venezuela and the uncertainty associated with the
war in Iraq. Construction revenue for the first quarter declined to $65.6
million from $83.3 million for the same period last year. Engineering revenue
for the quarter decreased to $13.8 million from $49.9 million in the first
quarter of last year. Specialty services revenue in the first quarter increased
to $19.5 million from $14.3 million for the same period last year.
EBITDA(1) for the first quarter of 2003 was $0.5 million compared to
$15.1 million in 2002. The decrease in EBITDA for the first quarter of this year
was driven by the decline in revenue and a series of unforeseen costs related to
Bolivia, Chad-Cameroon and North America, which amount to approximately $7.0
million. These costs relate to contract variations, increased demobilization
costs and project delays. Willbros' accounting policy requires the Company to
record contract variation costs as incurred and to defer recognition of
anticipated revenue until it is reasonably assured. Management believes a
significant amount of the costs incurred in the first quarter will be recovered
as additional revenue in future periods.
In Bolivia, client-supplied defective valves delayed completion of the
project and created additional costs. Increased demobilization costs in Cameroon
partially caused by delays as a result of lack of availability of suitable ships
due to the conflict in Iraq also reduced earnings during the period. In North
America, weather delays and delays in contract awards impacted first quarter
results. In addition, the Company experienced reduced productivity from the
impact of social unrest in both Venezuela and Nigeria.
The combination of these factors resulted in the recognition of costs without
offsetting revenue and an earnings shortfall in the first quarter.
Net loss for the first quarter of 2003, was $4.6 million or $0.22 per
fully diluted shares of 20.6 million, versus net income of $4.6 million or $0.30
per fully diluted shares of 15.5 million in 2002. Backlog(2) as of March 31,
2003 was $218.3 million, with an imbedded margin of 27.5 percent compared to
$216.0 million at the end of 2002, with an imbedded margin of 22.1 percent. The
increase in backlog is primarily from new project awards in North America,
Africa and the Middle East.
"We have seen an increase in the level of bid activity, even in North
America," commented Michael F. Curran, Willbros President and Chief Executive
Officer. "Despite the slowdown in the U.S. natural gas pipeline industry, our
backlog has risen since the end of 2002 and we have been awarded nearly half of
the anticipated new work we discussed in our last earnings conference call. New
projects in North America, Africa and the Middle East make up the increase in
backlog. We are cautiously optimistic that contract awards will continue to grow
and provide us earnings visibility, along with our Opal project, which is
currently under budget and on schedule to commence commercial operation in early
2004."
RECENT DEVELOPMENTS
In early March, Willbros Mt. West, based in Fruita, Colorado, reached
agreement with a subsidiary of The Williams Companies to construct and own a
fourth gas processing train at Opal, in southwestern Wyoming. The initial terms
of the gas processing and operating agreements are for ten years. The plant is
expected to generate over $325 million in revenue during the ten-year period of
the agreements. Willbros Mt. West will derive its revenue from both an annual
processing fee and the sale of the liquids extracted from the processing of the
natural gas. The facility is scheduled to be completed and in operation by early
2004. Management believes this project would contribute $0.15 to $0.20 in
earnings per share in 2004 based on a project model which assumes a historical
five-year average price of natural gas liquids to forecast the contribution from
the sale of gas liquids. The project's contribution to earnings will vary based
on actual prices for natural gas liquids and other factors.
Also in March, one of Willbros' construction units, The Oman
Construction Company (TOCO), based in Muscat, Oman, was selected to perform an
engineering, procurement and construction contract for a natural gas pipeline
system in Oman for Occidental of Oman Inc. The project consists of 105 miles
(169 kilometers) of 4-inch through 16-inch pipelines and associated facilities.
Work is anticipated to begin in the second quarter and is scheduled for
completion in early 2004.
In early May, Willbros Mt. West was awarded additional work for the
modification of four compression stations for the Williams Columbia Gorge
project.
OUTLOOK
This press release contains forward-looking statements, and actual
results may differ materially. Information regarding some of the potential risks
which could cause actual results to differ from the forward-looking statements
herein are set forth below and in Willbros' filings with the Securities and
Exchange Commission.
Primarily as a result of the first quarter loss and also due to delays
in project bidding and awards, especially in Nigeria and in North and South
America, Willbros revised its 2003 outlook on April 23, 2003. Warren L.
Williams, Senior Vice President and Chief Financial Officer commented, "On April
23, we indicated that contract variations in excess of $50 million have been
fully documented and presented to our clients. While the timing and amount of
any future revenue recoveries are uncertain, we believe the terms and conditions
of our contracts strongly support our requests for additional revenue. These
potential future recoveries are not included in our guidance, due to Willbros'
accounting policy discussed above."
Mr. Williams added, "Based on current information and excluding any
revenue from the contract variations discussed above, we expect our 2003 revenue
to be in the range of $440 to $460 million and our earnings to be in the range
of $0.50 to $0.65 per fully diluted share. Furthermore, with the majority of our
first quarter challenges squarely behind us, we now expect earnings per diluted
share in the second quarter of 2003 to range between $0.15 and $0.20."
Mr. Curran added, "Our level of bid activity remains encouraging and
our medium and long-term fundamentals remain solid. All our markets, including
new ones in Southeast Asia, continue to provide new work opportunities. Our
current bids and current assessment of prospects to be bid and awarded before
the end of the third quarter include over $1.2 billion worth of projects. These
developments, including the Opal gas processing facility starting next year,
lead us to believe that the second half of 2003 will see increased activity
giving us momentum into 2004."
CONFERENCE CALL
Willbros has scheduled a conference call for May 8, 2003, at 10:00 a.m.
eastern time. To participate in the conference call, dial (303) 262-2142 at
least ten minutes before the call begins and ask for the Willbros conference
call. A replay of the conference call will be available through May 15, 2003. To
access the replay, dial 303-590-3000 using the pass code of 538126.
Investors, analysts and the general public will also have the
opportunity to listen to the conference call over the Internet by accessing
www.willbros.com. To listen to the live call on the web, please visit the web
site at least 15 minutes early to register, download and install any necessary
audio software. For those who cannot listen to the live web cast, an archive
will be available shortly after the call and for a period of 12 months.
Willbros Group, Inc. is one of the leading independent contractors
serving the oil, gas and power industries, providing construction, engineering
and other specialty
oilfield-related services to industry and government entities worldwide. For
more information on Willbros, please visit our web site at www.willbros.com.
(1) EBITDA is earnings before net interest, income taxes and depreciation
and amortization. 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 exhibits to this release.
(2) Backlog is anticipated contract revenue from executed contracts for
which award is either in hand or assured.
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 such things
as future E&P capital expenditures, oil, gas, gas liquids and power prices and
demand, the amount and location of planned pipelines, the effective tax rate of
the different countries where the work is being conducted, development trends of
the oil, gas and power 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.
(Table to Follow)
WILLBROS GROUP, INC.
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
MARCH 31
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UNAUDITED
2003 2002
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Statement of Income Data
Contract revenue $ 98.9 $ 147.5
Operating expenses:
Contract cost 89.1 122.8
Depreciation and amortization 5.7 5.4
General and administrative 9.0 8.8
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Operating income (loss) (4.9) 10.5
Net interest expense (.4) (.3)
Other expense (.3) (.8)
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Income (loss) before income taxes (5.6) 9.4
Provision (benefit) for income taxes (1.0) 4.8
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Net income (loss) $ (4.6) $ 4.6
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Earnings (loss) per share:
Basic $ (.22) $ .31
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Diluted $ (.22) $ .30
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Cash Flow Data
Cash provided by (used in):
Operating activities $ (22.7) $ (2.2)
Investing activities (4.9) (7.0)
Financing activities -- 1.3
Other Data
Weighted average shares outstanding:
Basic 20.6 14.9
Diluted 20.6 15.5
EBITDA $ .5 $ 15.1
Capital expenditures 5.3 7.0
Reconciliation of Non-GAAP Financial Measure
Net income (loss) $ (4.6) $ 4.6
Interest - net .4 .3
Income taxes (1.0) 4.8
Depreciation and amortization 5.7 5.4
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EBITDA $ 0.5 $ 15.1
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Balance Sheet Data 03/31/03 12/31/02
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Cash and cash equivalents $ 21.9 $ 49.5
Working capital 89.5 90.9
Total assets 275.6 298.2
Total debt 0.8 1.2
Stockholders' equity 207.1 210.8
Backlog Data 218.3 216.0