EX-99.1 2 v157269_ex99-1.htm
 
Exhibit 99.1

FOR IMMEDIATE RELEASE

Willbros Announces Second Quarter 2009 Results

 
·
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

HOUSTON, TX, AUGUST 5, 2009Willbros 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.”
 

 
 
1 of 3
   
CONTACT:
Michael W. Collier
Connie Dever
 
Vice President Investor Relations
Director Strategic Planning
 
Sales & Marketing
Willbros
 
Willbros
713-403-8035
713-403-8038
 
 

 
 
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
 

 
 
2 of 5
   
CONTACT:
Michael W. Collier
Connie Dever
 
Vice President Investor Relations
Director Strategic Planning
 
Sales & Marketing
Willbros
 
Willbros
713-403-8035
713-403-8038
 
 

 
 
 
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
 

 
 
3 of 5
   
CONTACT:
Michael W. Collier
Connie Dever
 
Vice President Investor Relations
Director Strategic Planning
 
Sales & Marketing
Willbros
 
Willbros
713-403-8035
713-403-8038
 
 


 
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  
 

 
 
4 of 5
   
CONTACT:
Michael W. Collier
Connie Dever
 
Vice President Investor Relations
Director Strategic Planning
 
Sales & Marketing
Willbros
 
Willbros
713-403-8035
713-403-8038
 
 

 
 
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 Willbrso 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  

 
 
6/30/2009
   
3/31/2009
   
12/31/2008
 
Balance Sheet Data 
                       
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.
 
###
 

 
 
5 of 5
   
CONTACT:
Michael W. Collier
Connie Dever
 
Vice President Investor Relations
Director Strategic Planning
 
Sales & Marketing
Willbros
 
Willbros
713-403-8035
713-403-8038