SOURCE: Willbros Group, Inc.

Willbros Group, Inc.

August 05, 2009 18:00 ET

Willbros Announces Second Quarter 2009 Results

HOUSTON, TX--(Marketwire - August 5, 2009) - Willbros Group, Inc. (NYSE: WG)

--  Earnings from continuing operations for Q2 2009 of $0.27 per diluted
    share
--  EBITDA(2) from continuing operations of $28.6 million
--  Maintains financial flexibility with $245 million cash balance
    

Willbros Group, Inc. (NYSE: WG) today reported its results for the second quarter 2009. On revenue of $354.5 million, Willbros reported that net income for the second quarter 2009 was $8.9 million, or $0.23 per diluted share compared to net income of $18.8 million, or $0.47 per diluted share for the quarter ended June 30, 2008.

Randy Harl, President and Chief Executive Officer, commented, "Our balance sheet remains strong and continues to provide us the financial flexibility to deliver on our strategic initiatives to transform Willbros into a significant global participant in the engineering and construction industry. We continue to make progress advancing our long term strategy of diversifying our geography, end markets and service offerings, as highlighted by our acquisition of the engineering business of the Wink Companies, which completes our downstream EPC capability. Our Upstream engineering, procurement and construction, (EPC) capability has been a powerful differentiator for us; with the Wink acquisition, we can now offer integrated EPC services in the Downstream market as well.

Our initiative to diversify our markets is also progressing as we were selected as an Indefinite Delivery Indefinite Quantity (IDIQ) contractor by the U.S. Navy, Naval Facilities Engineering Command (NAVFAC) which will give us the opportunity to compete for future task orders to perform assessments, inspections, repairs, and construction services for U.S. Navy fuel systems worldwide. We are excited about the opportunity to participate in this $350 million contract and are confident that we can leverage this opportunity and our capabilities and experience providing fuel systems to the U.S. armed forces into meaningful revenue and income going forward.

Additionally, our focus on developing a revenue base with a greater portion of recurring services and lifecycle extension activities has the potential to mitigate the volatility associated with capital projects and provides us a more stable revenue base going forward.

I'm pleased with the solid execution on fixed price work in our Upstream segment, which has validated our investment in procedures, processes and controls to improve our project execution. We continue to focus on operational, business development and cost initiatives to address the near term market while positioning the company for continued profitable activity, a return to a growth environment and future strategic acquisition opportunities."

Second Quarter 2009 Continuing Operations

The Company reported revenue from continuing operations of $354.5 million in the second quarter of 2009 compared to $467.7 million in the second quarter of 2008. The 24 percent decrease in revenue was due to lower levels of activity in both Upstream and Downstream Oil & Gas segments, which resulted from declines in available capital projects and delay of non-critical maintenance activities. During the second quarter of 2009, the Upstream Oil & Gas segment generated $261.4 million of revenue. This is a 22 percent decrease in revenue compared to the same quarter last year. These year over year decreases resulted from (1) the completion of several EPC projects, which wrapped up late in 2008 and early 2009, (2) a major pipeline project which was completed in early 2009 and (3) reduced levels of engineering services. These decreases were partially offset by increased revenue and operating income from the company's Canadian operations.

The Downstream segment generated revenue of $93.1 million, a decrease of 29 percent compared to the second quarter of last year, a result of a more rapid and sustained drop off in activity than expected as customers delayed both capital and certain maintenance spending in response to their challenging market conditions. As a result, the Company is actively addressing its cost structure in the Downstream segment, as well as across the entire business, with the objective of balancing the opportunities in the current market with those it expects to see in 2010. The Downstream segment, which benefited from multiple fixed price capital projects in the second quarter of 2008, was also impacted by change orders, which have not yet been approved by the clients, associated with facilities projects in the second quarter of 2009.

Backlog(1)

At June 30, 2009, Willbros reported backlog(1) from continuing operations of $387.2 million compared to $655.5 million at December 31, 2008. At June 30, 2009, approximately 68 percent of backlog was cost reimbursable contracts.

Guidance

Van Welch, Chief Financial Officer, commented, "Our visibility for the second half of 2009 continues to be limited due to the rapidly changing business environment. With that in mind, we expect revenue for 2009 to be in the range of our previous guidance of $1.1 - $1.3 billion, and we now expect earnings to range towards the lower end of our previous guidance of $0.80 - $1.10 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 Thursday, August 6, 2009 at 9:00 a.m. Eastern Time (8:00 a.m. Central).

What:   Willbros Group, Inc. Second Quarter 2009 Earnings Conference Call

When:   Thursday, August 6, 2009 - 9:00 a.m. Eastern Time

Where:  Live via phone by dialing 877-852-6583 or 719-325-4799, passcode
        4923476, 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 August 20, 2009 and may be accessed by calling 888-203-1112 or 719-457-0820 and using the passcode 4923476. 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 investigations; additional disruptions to the global credit markets; the current global recession; fines and penalties by government agencies; the identification of one or more other issues that require restatement of one or more prior period financial statements; 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 introduce new services to the markets served; 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, 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       Six Months Ended
                                    June 30                 June 30
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
Income Statement
  Contract revenue
    Upstream O&G            $  261,389  $  336,750  $  624,891  $  728,642
    Downstream O&G              93,094     130,967     193,517     230,709
                            ----------  ----------  ----------  ----------
                               354,483     467,717     818,408     959,351


  Operating expenses
    Upstream O&G               242,409     312,731     577,142     673,018
    Downstream O&G              93,180     118,581     196,277     214,624
                            ----------  ----------  ----------  ----------
                               335,589     431,312     773,419     887,642


  Operating income (loss)
    Upstream O&G                18,980      24,019      47,749      55,624
    Downstream O&G                 (86)     12,386      (2,760)     16,085
                            ----------  ----------  ----------  ----------
  Operating income (loss)       18,894      36,405      44,989      71,709


  Other expense
    Interest - net              (2,011)     (2,333)     (4,116)     (4,716)
    Other - net                   (217)        573         108         146
                            ----------  ----------  ----------  ----------
                                (2,228)     (1,760)     (4,008)     (4,570)
                            ----------  ----------  ----------  ----------
  Income from continuing
   operations before income
   taxes                        16,666      34,645      40,981      67,139
  Provision for income
   taxes                         5,675      14,576      13,915      28,393
                            ----------  ----------  ----------  ----------
  Income from continuing
   operations before
   noncontrolling interest      10,991      20,069      27,066      38,746
  Less: Income attributable
   to noncontrolling
   interest                       (423)       (563)     (1,171)     (1,020)
                            ----------  ----------  ----------  ----------
  Income from continuing
   operations attributable
   to Willbros Group, Inc.      10,568      19,506      25,895      37,726
  Income (loss) from
   discontinued operations
   net of provision for
   income taxes                 (1,660)       (736)     (1,500)      1,823
                            ----------  ----------  ----------  ----------
  Net income attributable
   to Willbros Group, Inc.  $    8,908  $   18,770  $   24,395  $   39,549
                            ==========  ==========  ==========  ==========

  Basic income (loss) per
   share attributable to
   Company shareholders:
    Continuing operations   $     0.27  $     0.51  $     0.67  $     0.99
    Discontinued operations      (0.04)      (0.02)      (0.04)       0.05
                            ----------  ----------  ----------  ----------
                            $     0.23  $     0.49  $     0.63  $     1.04
                            ==========  ==========  ==========  ==========

  Diluted income (loss) per
   share attributable to
   Company shareholders:
    Continuing operations   $     0.27  $     0.49  $     0.66  $     0.95
    Discontinued operations      (0.04)      (0.02)      (0.03)       0.04
                            ----------  ----------  ----------  ----------
                            $     0.23  $     0.47  $     0.63  $     0.99
                            ==========  ==========  ==========  ==========

Cash Flow Data
Continuing operations
  Cash provided by (used
   in)
    Operating activities    $   10,864  $   25,945  $   67,967  $   61,326
    Investing activities         1,582      (7,002)     (1,558)     (9,587)
    Financing activities       (22,540)    (19,002)    (29,367)    (27,435)
    Foreign exchange
     effects                     1,204         804         565        (573)
Discontinued operations         (1,280)      2,855         (79)      2,592

Other Data (Continuing
 Operations)
  Weighted average shares
   outstanding
    Basic                       38,684      38,378      38,624      38,198
    Diluted                     43,730      43,874      43,641      43,972
  EBITDA(2)                 $   28,591  $   48,498  $   65,492  $   93,622
  Capital expenditures           3,474      10,193       6,659      31,623

Reconciliation of Non-GAAP
 Financial Measure

  EBITDA (2)
    Net income from
     continuing operations
     attributable to
     Willbros Group, Inc.   $   10,568  $   19,506  $   25,895  $   37,726
    Interest - net               2,011       2,333       4,116       4,716
    Provision for income
     taxes                       5,675      14,576      13,915      28,393
    Depreciation and
     amortization               10,337      12,083      21,566      22,787
                            ----------  ----------  ----------  ----------
    EBITDA                  $   28,591  $   48,498  $   65,492  $   93,622
                            ==========  ==========  ==========  ==========


Balance Sheet Data           6/30/2009   3/31/2009  12/31/2008
                            ----------  ----------  ----------
  Cash and cash equivalents $  245,392  $  255,562  $  207,864
  Working capital              321,419     307,164     285,166
  Total assets                 779,096     793,421     787,344
  Total debt                   102,263     117,723     120,514
  Stockholders' equity         477,566     457,770     442,556

Backlog Data (1)
  By Reporting Segment
    Upstream O&G            $  214,441  $  349,268  $  447,495
    Downstream O&G             172,745     188,937     207,999
                            ----------  ----------  ----------
                            $  387,186  $  538,205  $  655,494
                            ==========  ==========  ==========

  By Geographic Area
    North America           $  358,415  $  512,347  $  621,313
    Middle East                 28,771      25,858      34,181
                            ----------  ----------  ----------
                            $  387,186  $  538,205  $  655,494
                            ==========  ==========  ==========

(1)  Backlog is anticipated contract revenue from projects for which award
     is either in hand or assured.
(2)  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.

Contact Information

  • CONTACT:

    Michael W. Collier
    Vice President Investor Relations
    Sales & Marketing
    Willbros
    713-403-8038

    Connie Dever
    Director Strategic Planning
    Willbros
    713-403-8035