SOURCE: Willbros Group, Inc.

Willbros Group, Inc.

March 11, 2010 08:36 ET

Willbros Reports 2009 Results

HOUSTON, TX--(Marketwire - March 11, 2010) -


--  Revenue $1.3 billion, net income from continuing operations of $19.3
    million, $0.50 per basic and diluted share
--  Fourth quarter includes other charges of $4.5 million
--  Backlog at December 31, 2009 $392 million

Willbros Group, Inc. (NYSE: WG) announced results for the fourth quarter and full year 2009. For the full year 2009, Willbros reported net income from continuing operations of $19.3 million, or $0.50 per basic and diluted share, on revenue of $1.3 billion. The full year results for 2009 were impacted by increased margin pressure, charges associated with right-sizing the organization and lower than anticipated utilization rates due to delays and cancellations of anticipated projects. In the fourth quarter, the Company recorded a loss from continuing operations, as previously anticipated, of $8.3 million, or $0.21 per share, on revenue of $193.9 million, primarily due to a lack of pipeline construction activity and additional charges associated with cost reductions, high levels of bidding activity, DOJ monitor costs and deal activity. Additionally, the Company held people and equipment for the start of the Fayetteville Express Pipeline project which has begun mobilization. Current markets remain challenging, especially with respect to timing of anticipated capital projects in the Downstream Oil & Gas segment. Fundamentals support strengthening levels of U.S. and Canadian pipeline projects beginning in the latter half of 2010 and into 2011 and 2012.

Randy Harl, President and Chief Executive Officer, explained, "On the whole, our fourth quarter results were in-line with our expectations; however, we elected to take additional other charges that will result in cost savings going forward. Even in the face of a severe market contraction, we have had a profitable year which I attribute to the disciplined efforts of our people as we adhere to our values and guide the Company through turbulent times. We are successfully expanding our alliance programs and our initiatives to re-enter international markets and are seeing the first of many awards we expect for our Government Services unit. Additionally, we will continue to improve our systems, processes and execution skills, positioning the Company for growth opportunities."

Segment Operating Results

The Upstream Oil & Gas segment reported operating income for the full year 2009 of $36.9 million on revenue of $982.6 million. For the fourth quarter of 2009, Upstream Oil & Gas reported an operating loss of $9.9 million on revenue of $128.5 million. Operating results were impacted by a slow-down in both Canada and U.S. pipeline construction, bidding costs and other charges associated with cost savings initiatives. The Downstream Oil & Gas segment reported full year operating income of $0.5 million on revenue of $277.3 million. For the fourth quarter of 2009, the Downstream segment reported an operating loss of $1.2 million on revenue of $65.4 million. The Downstream results for both the fourth quarter and the year were negatively impacted by curtailment of customer spending for small capital projects and maintenance in the refining sector and other charges associated with cost savings initiatives.

Organizational Alignment

For 2009, the Company incurred other charges of $12.7 million comprised of severance, accelerated stock vesting and lease abandonment charges to realign for changing market conditions. Total savings related to cost reductions in 2009 should result in annualized savings of approximately $46.1 million going forward. Management believes the significant process and systems improvements the Company has made over the last two years can be sustained once market activity increases.

Van Welch, Senior Vice President and Chief Financial Officer, commented, "Our processes and procedures to identify, price and manage the risk in fixed price work have been imbedded in the business model and successfully tested over the past four years. We will continue improving and adhering to these important management tools to ensure that the work we win and negotiate meets all our criteria to identify contractual and execution risks in any new work undertaken. We believe we have instilled the discipline to price, accept and book only work which meets stringent criteria for the Company's commercial success and profitability."

Strategic Initiatives

Willbros noted that its focus on diversification of its business model continues to provide new revenue opportunities as bid and work volumes increase in the Government Services, Pipeline Manage & Maintain and Pipeline Specialty Services businesses. Increased bid activities in these areas, as well as recent awards across business segments, have improved management's visibility into the first half of 2010. Additionally, management believes the Company is entering a critical period with respect to the award and pricing of construction bids tendered but not yet awarded.

Randy Harl, President and CEO, commented, "We view the success we have had over the past four years as critical to preparing the Company for this new business environment; one hastened by the financial events of the past two years. Our focus on introducing and proving more robust and effective controls, processes and procedures will continue, and we are confident that we will be advantaged in our pursuit of expansion into new markets and new services to meet the growth objectives of our strategy. Our view of the opportunities for Willbros remains positive and we expect to see improvement across our business lines by the end of the second quarter 2010. While the market for large diameter pipeline construction in the U.S. and Canada is not as robust as it has been in the recent past, we have the ability to pursue opportunities in global markets such as North Africa, the Middle East and Australia."

Backlog(1)

At December 31, 2009, Willbros reported backlog from continuing operations of $391.7 million compared to $501.4 million at September 30, 2009; approximately 37 percent of backlog was cost reimbursable contracts.

Conference Call

In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet on Thursday, March 11, 2010 at 9:00 a.m. Eastern Time (8:00 a.m. Central).

What:    Willbros Group, Inc. Fourth Quarter and Full Year 2009 Earnings
         Conference Call
When:    Thursday, March 11, 2010 - 9:00 a.m. Eastern Time
Where:   Live via phone by dialing 888-277-7138 or 913-312-1477, passcode
         1845874, 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 March 12, 2010 and may be accessed by calling 888-203-1112 or 719-457-0820 and using the passcode 1845874. 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.

                           WILLBROS GROUP, INC.
                 (In thousands, except per share amounts)

                           Three Months Ended       Twelve Months Ended
                              December 31               December 31
                        ------------------------  ------------------------
                            2009         2008         2009         2008
                        -----------  -----------  -----------  -----------
Income Statement
  Contract revenue
    Upstream O&G        $   128,503  $   374,622  $   982,568  $ 1,545,629
    Downstream O&G           65,374       88,080      277,250      367,075
                        -----------  -----------  -----------  -----------
                            193,877      462,702    1,259,818    1,912,704


  Operating expenses
    Upstream O&G            138,401      347,909      945,685    1,436,748
    Downstream O&G           66,583      145,931      276,751      406,154
                        -----------  -----------  -----------  -----------
                            204,984      493,840    1,222,436    1,842,902


  Operating income
   (loss)
    Upstream O&G             (9,898)      26,713       36,883      108,881
    Downstream O&G           (1,209)     (57,851)         499      (39,079)
                        -----------  -----------  -----------  -----------
  Operating income
   (loss)                   (11,107)     (31,138)      37,382       69,802


  Other expense
    Interest - net           (2,235)      (1,958)      (8,328)      (9,032)
    Other - net                 838        7,679          820        7,883
                        -----------  -----------  -----------  -----------
                             (1,397)       5,721       (7,508)      (1,149)
                        -----------  -----------  -----------  -----------
  Income (loss) from
   continuing
   operations before
   income taxes             (12,504)     (25,417)      29,874       68,653
  Provision (benefit)
   for income taxes          (4,520)     (10,508)       8,737       25,942
                        -----------  -----------  -----------  -----------
  Income (loss) from
   continuing
   operations                (7,984)     (14,909)      21,137       42,711
  Income (loss) from
   discontinued
   operations net of
   provision for income
   taxes                         30         (285)      (1,497)       2,757
                        -----------  -----------  -----------  -----------
  Net income (loss)          (7,954)     (15,194)      19,640       45,468
  Less: Income
   attributable to
   noncontrolling
   interest                    (274)        (403)      (1,817)      (1,836)
                        -----------  -----------  -----------  -----------
  Net income (loss)
   attributable to
   Willbros Group, Inc. $    (8,228) $   (15,597) $    17,823  $    43,632
                        ===========  ===========  ===========  ===========
  Reconciliation of
   net income (loss)
   attributable to
   Willbros Group, Inc.
  Income (loss) from
   continuing
   operations           $    (8,258) $   (15,312) $    19,320  $    40,875
  Income (loss) from
   discontinued
   operations                    30         (285)      (1,497)       2,757
                        -----------  -----------  -----------  -----------
  Net income (loss)
   attributable to
   Willbros Group, Inc. $    (8,228) $   (15,597) $    17,823  $    43,632
                        ===========  ===========  ===========  ===========

  Basic income (loss)
   per share
   attributable to
   Company
   shareholders:
    Continuing
     operations         $     (0.21) $     (0.40) $      0.50  $      1.07
    Discontinued
     operations                   -        (0.01)       (0.04)        0.07
                        -----------  -----------  -----------  -----------
                        $     (0.21) $     (0.41) $      0.46  $      1.14
                        ===========  ===========  ===========  ===========

  Diluted income (loss)
   per share
   attributable to
   Company
   shareholders:
    Continuing
     operations         $     (0.21) $     (0.40) $      0.50  $      1.05
    Discontinued
     operations                   -        (0.01)       (0.04)        0.07
                        -----------  -----------  -----------  -----------
                        $     (0.21) $     (0.41) $      0.46  $      1.12
                        ===========  ===========  ===========  ===========

Cash Flow Data
Continuing operations
  Cash provided by
   (used in)
    Operating
     activities         $   (27,172) $    91,350  $    54,058  $   188,543
    Investing
     activities             (17,945)      12,218      (34,036)     (11,725)
    Financing
     activities              (2,853)     (18,428)     (35,056)     (60,044)
    Foreign exchange
     effects                  2,990       (4,502)       6,135       (5,001)
Discontinued operations          31         (326)        (191)       3,205

Other Data (Continuing
 Operations)
  Weighted average
   shares outstanding
    Basic                    38,778       38,367       38,687       38,269
    Diluted                  38,778       38,367       38,883       38,764
  EBITDA(2)             $      (765) $    49,348  $    77,245  $   183,047
  Capital expenditures        2,738        7,063       13,107       53,048

Reconciliation of
 Non-GAAP Financial
 Measure

  EBITDA (2)
    Net income (loss)
     from continuing
     operations
     attributable to
     Willbros Group,
     Inc.               $    (8,258) $   (15,312) $    19,320  $    40,875
    Interest - net            2,235        1,958        8,328        9,032
    Provision (benefit)
     for income taxes        (4,520)     (10,508)       8,737       25,942
    Depreciation and
     amortization             9,778       10,915       40,860       44,903
    Goodwill impairment           -       62,295            -       62,295
                        -----------  -----------  -----------  -----------
    EBITDA              $      (765) $    49,348  $    77,245  $   183,047
                        ===========  ===========  ===========  ===========



Balance Sheet Data       12/31/2009   9/30/2009    6/30/2009    3/31/2009
                        -----------  -----------  -----------  -----------
  Cash and cash
   equivalents          $   198,774  $   243,723  $   245,392  $   255,562
  Working capital           297,294      327,259      321,419      307,164
  Total assets              728,378      758,290      779,096      793,421
  Total debt                104,037      104,967      102,263      117,723
  Stockholders' equity      487,196      487,439      477,566      457,770

Backlog Data (1)
  By Reporting Segment
    Upstream O&G        $   245,586  $   310,407  $   235,724  $   383,795
    Downstream O&G          146,156      190,951      151,462      154,410
                        -----------  -----------  -----------  -----------
                        $   391,742  $   501,358  $   387,186  $   538,205
                        ===========  ===========  ===========  ===========


  By Geographic Area
    North America       $   368,447  $   465,259  $   358,415  $   512,347
    Middle East & North
     Africa                  23,295       36,099       28,771       25,858
                        -----------  -----------  -----------  -----------
                        $   391,742  $   501,358  $   387,186  $   538,205
                        ===========  ===========  ===========  ===========

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