Willbros Reports Second Quarter 2013 Results from Continuing Operations

HOUSTON, Aug. 8, 2013 /PRNewswire/ -- Willbros Group, Inc. (NYSE: WG) announced today results from continuing operations for the second quarter of 2013. The Company reported net income from continuing operations of $1.0 million, or $0.02 per share, on revenue of $487.9 million, compared to a net loss from continuing operations in the second quarter of 2012 of $2.0 million, or ($0.04) per share, on revenue of $450.4 million. The Company reported operating income of $9.4 million for the second quarter of 2013 compared to operating income of $7.5 million in the second quarter of 2012. 

Randy Harl, President and Chief Executive Officer, commented, "We are pleased with the strong operating results generated by our Utility T&D and Professional Services segments, and another consecutive quarter of solid performance in Canada. However, I am disappointed with the performance of our regional service lines in the Oil & Gas segment which negatively impacted our results again this quarter. We have taken actions to resolve the root causes of these issues in the first half of this year and results in the regions for the month of June were breakeven as the loss projects are essentially completed. I expect material improvement from these operations for the remainder of the year.

"Our second quarter results demonstrate the capability of our diversified business model to deliver improved results. The solid performance in three of our segments has generated positive consolidated results. Going forward, we expect continued solid performance in these segments and improved results in our Oil & Gas segment."

Segment Operating Results
Oil & Gas
For the second quarter of 2013, the Oil & Gas segment reported an operating loss of $18.8 million on revenue of $186.4 million, compared to an operating loss of $3.5 million in the second quarter 2012. The segment results were negatively impacted by additional losses incurred in the regional service lines, in addition to lower utilization in our cross-country pipeline construction operations. Revenue generated from our downstream construction and maintenance activities increased over 40 percent from the second quarter of 2012 as a result of greater turnaround activity, as well as higher utilization of shops and fabrication resources.

Utility T&D
The Utility T&D segment generated revenue of $128.3 million, essentially flat compared to a year ago, and $15.6 million of operating income, an improvement of approximately $6.3 million of operating income over the second quarter of 2012. The increase in operating performance is primarily related to expanding margins in our transmission construction which benefited from storm restoration work in Texas and Oklahoma, successful completion of two more of the CREZ projects and the early start on a new transmission construction project in the Texas Panhandle.

Canada
The Canada segment reported operating income of $4.3 million, an improvement of $7.2 million over the second quarter of 2012, on revenue of $87.4 million. Contract revenue increased $50.0 million from the second quarter of 2012 resulting in a $128.1 million increase for the first six months compared to last year. Canada delivered a third consecutive quarter of solid operating results as it continues to benefit from its focus on the oil sands mine sites and in situ extraction developments. The improvement in operating income compared to last year was attributable to our specialty construction and integrity services, ongoing infrastructure replacement construction projects and additional maintenance work performed for our key oil sands mining customers. 

Professional Services
The Professional Services segment reported operating income of $8.2 million, or 9.4 percent operating margins, an improvement of approximately $3.6 million relative to the second quarter of 2012. Revenue of $87.4 million was a slight increase compared to the second quarter of 2012 largely due to increased activity in our locating service which we expanded into new geographies during the first quarter. In addition to benefiting from expanding our integrity services, including line locating services, operating income for the quarter also improved due to strong performance in our upstream and midstream engineering, right-of-way, survey and government services.

Backlog⁽²⁾
At June 30, 2013, Willbros maintained backlog from continuing operations at $2.0 billion compared to $2.0 billion at March 31, 2013. Twelve month backlog increased to $919 million at June 30, 2013 compared to $880 million at March 31, 2013. Shortly after the close of the second quarter our Oil & Gas segment was awarded a contract to construct more than 150 miles of 30-inch pipeline from central Oklahoma to the Red River, and our Utility T&D segment won an additional 100+ miles of 345Kv line construction in western Oklahoma. Both projects will be recorded in third quarter backlog.

Credit Facility and Liquidity
Effective August 7, 2013, the Company completed the refinancing of its Amended and Restated Credit Agreement by entering into a five-year $150.0 million asset based senior revolving credit facility (the "ABL Credit Facility") maturing in 2018 and a six-year $250.0 million term loan facility (the "2013 Term Loan Facility") maturing in 2019. Proceeds from the 2013 Term Loan Facility were used to repay all indebtedness under the existing term loan facility and revolving credit facility under the Amended and Restated Credit Agreement, to pay fees and expenses incurred in connection with the transactions and for working capital purposes. The ABL Credit Facility was undrawn at close.

Van Welch, Executive Vice President and Chief Financial Officer, commented, "We have completed our refinancing and, with extended debt maturity to 2019, greater flexibility under our covenants, and a $150 million revolver, we are financially sound and have adequate liquidity to execute our plan going forward."

Conference Call
In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet, on Friday, August 9, 2013 at 9:00 a.m. Eastern Time (8:00 a.m. Central).

For those who cannot listen to the live call, a replay will be available through August 16, 2013 and may be accessed by calling 303-590-3030 or 800-406-7325 using pass code 4633635#.  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), turnarounds, maintenance, facilities development and operations 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  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 consequences the Company may encounter if it is unable to make payments required of it pursuant to its settlement agreement of the West African Gas Pipeline Company Limited lawsuit; the existence of material weaknesses in internal control 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 existing loan agreements; 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.

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SOURCE Willbros Group, Inc.