- Definitive proxy statement filed May 2, 2018
- Special Meeting of Stockholders scheduled for May 31, 2018
- Process to finalize merger remains on schedule
HOUSTON, May 09, 2018 (GLOBE NEWSWIRE) -- Willbros Group, Inc. (OTC:WGRP) today announced financial results for
the first quarter of 2018. The Company reported a net loss of $17.0 million, or $(0.27) per diluted share, in the first quarter of
2018 on revenue of $201.0 million, compared to a net loss of $17.8 million, or $(0.29) per diluted share, in the first quarter of
2017 on revenue of $163.9 million.
An operating loss of $10.5 million in the first quarter of 2018 compares to an operating loss of $14.9 million
in the first quarter of 2017. Included in the first quarter of 2018 operating loss are $8.4 million of other charges, primarily
related to professional fees associated with evaluating various strategic alternatives, including negotiation of the pending
transaction with Primoris Services Corporation. Also included in the first quarter of 2018 operating loss are $6.1 million of gains
on the sale of assets, primarily related to the previously announced sales of the mainline pipeline construction assets and the
tank services business.
Michael Fournier, President and CEO, commented, “Integration planning with Primoris has commenced and we are
focused on finalizing the transaction. The special meeting of stockholders is scheduled for May 31, 2018 and, assuming transaction
approval is obtained, completion of the merger will occur quickly.”
Backlog
Twelve-month backlog of $425.3 million at March 31, 2018 decreased $51.9 million, or approximately 11% from
December 31, 2017, primarily due to a significant reduction in the Oil & Gas segment backlog resulting from work completed on the
mainline pipeline and facility construction projects. Both the Utility T&D and Canada segments reported an increase in
twelve-month backlog at March 31, 2018 compared to December 31, 2017.
Total backlog of $635.4 million at March 31, 2018 increased $19.0 million from December 31, 2017, with all of
the increase attributable to the Utility T&D segment.
Segment Operating Results
Utility T&D
The Utility T&D segment reported revenue of $112.6 million for the first quarter of 2018, a $2.9
million decrease compared to the first quarter of 2017. The segment reported operating income of $1.9 million in the
first quarter of 2018 compared to operating income of $0.8 million in the first quarter of 2017. The higher operating income was
generated by improved margins in the electric transmission business due to productivity gains and greater equipment utilization,
coupled with margin improvement in the expanding WTD Southeast distribution business due to revenue growth. These improvements were
partially offset by margin deterioration in the WTD East distribution business due to a reduction in volume and lengthy weather
delays on existing projects.
Oil & Gas
For the first quarter of 2018, the Oil & Gas segment reported revenue of $62.6 million and operating
income of $1.0 million, an $8.3 million increase in operating income from the first quarter of 2017 when this segment generated
$22.4 million in revenue. The improvement in operating income was primarily due to a gain on asset sales of $5.5 million, an
increase in the utilization of equipment and a reduction of operating losses associated with our mainline pipeline and integrity
construction businesses.
Canada
Canada revenue of $25.8 million for the first quarter of 2018 was relatively flat when compared to the
first quarter of 2017. The segment reported an operating loss of $0.9 million in the first quarter of 2018 compared to an operating
loss of $3.3 million in the first quarter of 2017. This improvement in operating income was primarily driven by a higher volume of
maintenance work and specialty fabrication projects.
Liquidity
Total liquidity at March 31, 2018 was $21.4 million which represents only unrestricted cash and cash equivalents. In March 2018,
we entered into forbearance agreements with our lenders as a result of noncompliance with certain provisions of our term and ABL
credit agreements. The forbearance agreements provide that our lenders will refrain from pursuing any remedies with respect to
certain events of default under our credit agreements for a limited period as we work to complete the merger transaction and
provided we comply with the provisions of the agreements. The ABL forbearance agreement also prohibits the company from borrowing
additional funds under its existing ABL credit facility. At March 31, 2018, borrowings under the ABL credit facility totaled $23.0
million. On March 30, 2018, an additional $10 million loan was provided under the term credit agreement by Primoris. The Primoris
loan is repayable if the transaction does not close.
Total liquidity was $48.8 million at December 31, 2017, consisting of $33.5 million of unrestricted cash and revolver
availability of $15.3 million. This significant reduction in liquidity during the first quarter of 2018 was primarily due to the
operating losses incurred in the fourth quarter of 2017 and first quarter of 2018 and our inability to access the revolver under
the ABL forbearance agreement.
Conference Call
As a result of Willbros’ pending transaction with Primoris Services Corporation, the company will not hold a conference call to
discuss its first quarter of 2018 results.
About Willbros
Willbros is a specialty energy infrastructure contractor serving the oil and gas and power industries with offerings that primarily
include construction, maintenance and facilities development services. 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 company’s stockholders may not approve the merger transaction; the conditions to the completion of the
transaction may not be satisfied, or any regulatory approvals required for the transaction may not be obtained on the terms
expected, on the anticipated schedule, or at all; closing of the transaction may not occur or may be delayed, either as a result of
litigation related to the transaction or otherwise; the parties may be unable to achieve the anticipated benefits of the
transaction; completing the merger may distract the company’s management from other important matters; inability
to obtain additional waivers, amendments or other forbearance under the company’s existing loan agreements; inability to achieve
anticipated margins on fixed price contracts; unanticipated accounting or other issues regarding any material weaknesses in
internal control over financial reporting; 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; the existence of other material weaknesses
in internal control over financial reporting; contract and billing disputes; 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; development trends of the oil and gas, and power 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.
SCHEDULES TO FOLLOW
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| WILLBROS GROUP, INC. |
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| (In thousands, except per share
amounts) |
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Three Months
Ended |
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March 31, |
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2018 |
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2017 |
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| Income Statement |
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Contract revenue |
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Utility T&D |
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$ |
112,612 |
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$ |
115,508 |
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Canada |
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25,803 |
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|
25,960 |
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Oil & Gas |
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62,639 |
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22,432 |
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| |
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Eliminations |
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(74 |
) |
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- |
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200,980 |
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163,900 |
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Operating expenses |
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Utility T&D |
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110,704 |
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114,724 |
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Canada |
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26,653 |
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29,300 |
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Oil & Gas |
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61,636 |
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29,768 |
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Corporate |
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12,534 |
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4,961 |
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Eliminations |
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(74 |
) |
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- |
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|
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211,453 |
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178,753 |
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Operating income (loss) |
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Utility T&D |
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1,908 |
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784 |
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Canada |
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(850 |
) |
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(3,340 |
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Oil & Gas |
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1,003 |
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(7,336 |
) |
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Corporate |
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(12,534 |
) |
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(4,961 |
) |
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Operating loss |
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|
(10,473 |
) |
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|
(14,853 |
) |
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Non-operating expenses |
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Interest expense |
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(6,528 |
) |
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(3,488 |
) |
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| |
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Interest income |
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8 |
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8 |
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Other, net |
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37 |
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(3 |
) |
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(6,483 |
) |
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|
(3,483 |
) |
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Loss from continuing operations before income taxes |
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(16,956 |
) |
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|
(18,336 |
) |
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Benefit for income taxes |
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(221 |
) |
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|
(600 |
) |
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Loss from continuing operations |
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(16,735 |
) |
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|
(17,736 |
) |
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Loss from discontinued operations net of provision for income
taxes |
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(230 |
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(31 |
) |
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Net loss |
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$ |
(16,965 |
) |
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$ |
(17,767 |
) |
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Basic loss per share attributable to Company
shareholders: |
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Continuing operations |
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$ |
(0.27 |
) |
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$ |
(0.29 |
) |
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Discontinued operations |
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- |
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- |
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| |
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$ |
(0.27 |
) |
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$ |
(0.29 |
) |
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Diluted loss per share attributable to Company
shareholders: |
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Continuing operations |
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$ |
(0.27 |
) |
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$ |
(0.29 |
) |
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Discontinued operations |
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|
- |
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- |
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| |
|
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$ |
(0.27 |
) |
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$ |
(0.29 |
) |
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| Cash Flow Data |
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| Continuing operations |
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Cash provided by (used in) |
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Operating activities |
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$ |
(25,939 |
) |
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$ |
(3,685 |
) |
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Investing activities |
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9,963 |
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|
1,551 |
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Financing activities |
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4,517 |
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(2,454 |
) |
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Foreign exchange effects |
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|
(139 |
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|
86 |
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| Discontinued operations |
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(404 |
) |
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|
(240 |
) |
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| Other Data (Continuing Operations) |
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Weighted average shares outstanding |
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Basic |
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|
62,405 |
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|
61,830 |
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Diluted |
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|
62,405 |
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|
61,830 |
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Adjusted EBITDA from continuing operations(1) |
|
$ |
(3,347 |
) |
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$ |
(9,012 |
) |
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Purchases of property, plant and equipment |
|
|
385 |
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|
493 |
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|
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| Reconciliation of Non-GAAP Financial Measures |
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| |
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| |
Adjusted EBITDA from continuing operations
(1) |
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|
|
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| |
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Loss from continuing operations |
|
$ |
(16,735 |
) |
|
$ |
(17,736 |
) |
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|
|
|
| |
|
Interest expense |
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|
6,528 |
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|
|
3,488 |
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|
|
|
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| |
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Interest income |
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|
(8 |
) |
|
|
(8 |
) |
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|
|
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| |
|
Benefit for income taxes |
|
|
(221 |
) |
|
|
(600 |
) |
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Depreciation and amortization |
|
|
4,315 |
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|
5,037 |
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| |
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Stock based compensation |
|
|
524 |
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|
906 |
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Legal and consulting costs |
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|
7,384 |
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|
274 |
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Restructuring related costs |
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|
946 |
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|
323 |
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|
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| |
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Gain on sale of assets |
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|
(6,080 |
) |
|
|
(696 |
) |
|
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|
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| |
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Adjusted EBITDA from continuing operations(1) |
|
$ |
(3,347 |
) |
|
$ |
(9,012 |
) |
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| Balance Sheet Data |
|
March 31,
2018 |
|
December 31,
2017 |
|
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Cash and cash equivalents |
|
$ |
21,364 |
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|
$ |
33,472 |
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|
|
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Working capital |
|
|
(92,364 |
) |
|
|
(83,884 |
) |
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Total assets |
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|
349,039 |
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|
363,877 |
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Total debt |
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|
139,902 |
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|
133,283 |
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|
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Stockholders' equity |
|
|
15,173 |
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|
|
31,708 |
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|
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| |
|
|
|
|
|
|
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| Backlog Data (2) |
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12 Month Backlog by Reporting Segment |
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|
|
|
|
|
|
|
| |
|
Utility T&D |
|
$ |
321,131 |
|
|
$ |
307,122 |
|
|
|
|
|
| |
|
Canada |
|
|
55,081 |
|
|
|
51,714 |
|
|
|
|
|
| |
|
Oil & Gas |
|
|
49,042 |
|
|
|
118,278 |
|
|
|
|
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| |
12 Month Backlog |
|
$ |
425,254 |
|
|
$ |
477,114 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
12 Month Backlog exclusive of Tank Services &
Mainline Pipeline Construction Services |
|
|
|
|
|
|
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| |
12 Month Backlog, as reported |
|
$ |
425,254 |
|
|
$ |
477,114 |
|
|
|
|
|
| |
Mainline Pipeline Construction Services 12 Month
Backlog |
|
|
9,053 |
|
|
|
20,734 |
|
|
|
|
|
| |
Tank Services 12 Month Backlog |
|
|
1,317 |
|
|
|
18,258 |
|
|
|
|
|
| |
12 Month Backlog, exclusive of Tank Services and
Mainline Pipeline Construction Services |
|
$ |
414,884 |
|
|
$ |
438,122 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Total Backlog By Reporting Segment |
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|
|
|
|
|
|
|
| |
|
Utility T&D |
|
$ |
489,351 |
|
|
$ |
387,284 |
|
|
|
|
|
| |
|
Canada |
|
|
96,970 |
|
|
|
110,770 |
|
|
|
|
|
| |
|
Oil & Gas |
|
|
49,042 |
|
|
|
118,278 |
|
|
|
|
|
| |
Total Backlog |
|
$ |
635,363 |
|
|
$ |
616,332 |
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|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
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| |
Total Backlog exclusive of Tank Services & Mainline
Pipeline Construction Services |
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|
|
|
|
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| |
Total Backlog, as reported |
|
$ |
635,363 |
|
|
$ |
616,332 |
|
|
|
|
|
| |
Mainline Pipeline Construction Services Total
Backlog |
|
|
9,053 |
|
|
|
20,734 |
|
|
|
|
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| |
Tank Services Total Backlog |
|
|
1,317 |
|
|
|
18,258 |
|
|
|
|
|
| |
Total Month Backlog, exclusive of Tank Services and
Mainline Pipeline Construction Services |
|
$ |
624,993 |
|
|
$ |
577,340 |
|
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|
|
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| |
|
|
|
|
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|
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(1)
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Adjusted EBITDA from continuing operations is defined
as income (loss) from continuing operations before interest expense (income), 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. |
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(2)
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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.
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