Willbros Reports First Quarter 2018 Results
May 09 2018 - 5:05PM
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 WillbrosWillbros 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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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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| |
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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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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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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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$ |
(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) |
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$ |
(3,347 |
) |
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$ |
(9,012 |
) |
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| |
Purchases
of property, plant and equipment |
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|
385 |
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|
493 |
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Reconciliation of Non-GAAP Financial Measures |
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| |
Adjusted
EBITDA from continuing operations (1) |
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| |
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Loss from
continuing operations |
|
$ |
(16,735 |
) |
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$ |
(17,736 |
) |
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|
|
|
| |
|
Interest
expense |
|
|
6,528 |
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|
|
3,488 |
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|
|
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| |
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Interest
income |
|
|
(8 |
) |
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|
(8 |
) |
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| |
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Benefit for
income taxes |
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(221 |
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|
(600 |
) |
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| |
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Depreciation and amortization |
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|
4,315 |
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|
5,037 |
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| |
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Stock based
compensation |
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|
524 |
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|
906 |
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| |
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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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Gain on
sale of assets |
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|
(6,080 |
) |
|
|
(696 |
) |
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| |
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Adjusted
EBITDA from continuing operations(1) |
|
$ |
(3,347 |
) |
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$ |
(9,012 |
) |
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| |
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| |
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| Balance Sheet Data |
|
March 31, 2018 |
|
December 31,
2017 |
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Cash and
cash equivalents |
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$ |
21,364 |
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$ |
33,472 |
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Working
capital |
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(92,364 |
) |
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|
(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 |
|
|
|
31,708 |
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|
|
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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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|
|
|
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|
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| |
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Utility
T&D |
|
$ |
321,131 |
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|
$ |
307,122 |
|
|
|
|
|
| |
|
Canada |
|
|
55,081 |
|
|
|
51,714 |
|
|
|
|
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| |
|
Oil &
Gas |
|
|
49,042 |
|
|
|
118,278 |
|
|
|
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| |
12 Month Backlog |
|
$ |
425,254 |
|
|
$ |
477,114 |
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|
|
|
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| |
|
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|
|
|
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|
|
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| |
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 |
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|
$ |
438,122 |
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| |
|
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|
|
|
|
|
|
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| |
Total Backlog By Reporting Segment |
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|
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|
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|
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| |
|
Utility
T&D |
|
$ |
489,351 |
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|
$ |
387,284 |
|
|
|
|
|
| |
|
Canada |
|
|
96,970 |
|
|
|
110,770 |
|
|
|
|
|
| |
|
Oil &
Gas |
|
|
49,042 |
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|
|
118,278 |
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|
|
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| |
Total Backlog |
|
$ |
635,363 |
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|
$ |
616,332 |
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| |
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|
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| |
Total Backlog exclusive of Tank Services & Mainline
Pipeline Construction Services |
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| |
Total Backlog, as reported |
|
$ |
635,363 |
|
|
$ |
616,332 |
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|
|
|
|
| |
Mainline Pipeline Construction Services Total Backlog |
|
|
9,053 |
|
|
|
20,734 |
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|
|
|
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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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| (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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