Willbros Reports Fourth Quarter and Full Year 2017 Results
March 29, 2018 - 6:35 PM EDT
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Willbros Reports Fourth Quarter and Full Year 2017 Results
Q1 2018 Backlog Additions of $212 Million for the Utility T&D Segment
Willbros shares are now traded on the OTC under the symbol WGRP
Due to the Recent Transaction Announcement with Primoris Services Corporation, No Conference Call will be Held
HOUSTON, March 29, 2018 (GLOBE NEWSWIRE) -- Willbros Group, Inc. (OTC:WGRP) today announced financial results for the fourth quarter and full year of 2017. The company reported a net loss in the fourth quarter of 2017 of $55.0 million, or $(0.89) per diluted share, on revenue of $217.9 million, compared to a net loss of $14.2 million, or $(0.23) per diluted share, on revenue of $164.4 million in the fourth quarter of 2016. For the full year 2017, the company reported a net loss of $108.1 million, or $(1.74) per diluted share, on revenue of $850.0 million, compared to a net loss of $47.8 million, or $(0.77) per diluted share, on revenue of $731.7 million for the full year of 2016.
Operating loss for the fourth quarter of 2017 was $49.1 million, compared to an operating loss of $27.8 million in the third quarter of 2017 and $12.1 million in the fourth quarter of 2016. The increase in the operating loss of $21.3 million compared to the third quarter of 2017 was primarily driven by a significant increase in losses associated with three mainline pipeline construction projects in the Oil & Gas segment. For the full year 2017, the company reported an operating loss of $91.3 million compared to a full year 2016 operating loss of $30.7 million. In January 2018, the company completed the sale of its tank services business and also reached agreement to sell assets comprising its mainline pipeline construction business.
On March 28, 2018, the company announced that it entered into a definitive agreement to be acquired by Primoris Services Corporation (NASDAQ:PRIM) (“Primoris”). The transaction has been unanimously approved by the Boards of Directors of both companies, is not subject to a financing condition, and is anticipated to close during the second quarter of 2018, subject to approval by the requisite vote of the Company’s stockholders and certain other closing conditions.
Michael J. Fournier, President and CEO, commented, “We look forward to working with Primoris to complete the transaction. The announced sale and additional liquidity of up to $20 million adds stability to the company as we move towards closing of this transaction.”
Segment Operating Results
Utility T&D For the fourth quarter of 2017, the Utility T&D segment reported an operating loss of $9.6 million on revenue of $109.9 million compared to an operating loss of $7.5 million on revenue of $129.9 million in the third quarter of 2017. The fourth quarter 2017 operating results were impacted by losses on two large discrete projects. These discrete projects were completed in the first quarter of 2018. For the full year 2017, the segment reported an operating loss of $5.3 million on revenue of $507.0 million. For the full year 2016, the segment reported operating income of $15.6 million on revenue of $418.4 million.
Oil & Gas For the fourth quarter of 2017, the Oil & Gas segment reported an operating loss of $35.0 million on revenue of $75.2 million compared to an operating loss of $14.8 million on revenue of $75.3 million in the third quarter of 2017. The fourth quarter 2017 operating results were impacted by a significant increase in losses associated with three mainline pipeline construction projects. Two of these projects have reached mechanical completion and the company reached a settlement to conclude the work on the third project in the first quarter of 2018. For the full year 2017, the segment reported an operating loss of $60.5 million on revenue of $221.9 million. For the full year 2016, the segment reported an operating loss of $16.8 million on revenue of $170.4 million.
Canada For the fourth quarter of 2017, the Canada segment reported operating income of $1.3 million on revenue of $32.9 million, compared to an operating loss of $0.3 million on revenue of $35.6 million in the third quarter of 2017. The $1.6 million increase was primarily driven by high productivity on an integrity dig project and gross margin increases on the close-out of other discrete projects. For the full year 2017, the segment reported an operating loss of $4.0 million on revenue of $121.2 million. For the full year 2016, the segment reported an operating loss of $0.7 million on revenue of $143.1 million.
Corporate
For the full year 2017, the company recorded $21.5 million of corporate overhead costs compared to $28.8 million of corporate overhead costs for the full year 2016.
Backlog
At December 31, 2017, the company reported total backlog of $616.3 million compared to $741.3 million at September 30, 2017. Twelve-month backlog of $477.1 million at December 31, 2017 decreased $66.8 million from September 30, 2017. The decrease in total and twelve-month backlog is primarily related to a reduction in discrete projects in the Oil & Gas segment, as well as a reduction in MSA backlog in the Utility T&D segment due to the overall timing of renewal.
During the first quarter of 2018, the Utility T&D segment received $212 million in contract extensions or new awards, including a one-year contract extension with one of our key clients amounting to approximately $180 million. The remaining $32 million in awards consists of multiple MSA contract extensions and small discrete projects.
Liquidity
Total liquidity (defined as cash and cash equivalents plus revolver availability) was $48.8 million at December 31, 2017. Cash and cash equivalents totaled $33.5 million at December 31, 2017. As a result of the operating loss we incurred in the fourth quarter 2017, we have had a significant reduction in our liquidity during the first quarter of 2018. In order to address this decrease in liquidity, in March 2018 we obtained additional liquidity up to $20.0 million through an amendment to our Term Credit Agreement. This additional liquidity was provided by Primoris and is repayable if the transaction does not close.
In addition, in March 2018, we entered into forbearance agreements with our lenders as a result of noncompliance with certain default provisions, including the inability to deliver audited financial statements without a going concern explanation and the inability to meet certain future financial covenants. 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.
Conference Call
As a result of Willbros’ pending transaction with Primoris, the company will not hold a conference call to discuss quarterly and full year 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 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
WILLBROS GROUP, INC.
(In thousands, except per share amounts)
Three Months Ended
Year Ended
December 31,
December 31,
2017
2016
2017
2016
Income Statement
Contract revenue
Utility T&D
$
109,881
$
105,321
$
506,978
$
418,387
Canada
32,876
35,797
121,151
143,140
Oil & Gas
75,191
23,274
221,939
170,448
Eliminations
(85
)
-
(85
)
(290
)
217,863
164,392
849,983
731,685
Operating expenses
Utility T&D
119,455
103,236
512,259
402,820
Canada
31,571
37,561
125,196
143,790
Oil & Gas
110,160
29,038
282,444
187,231
Corporate
5,819
6,697
21,510
28,795
Eliminations
(85
)
-
(85
)
(290
)
266,920
176,532
941,324
762,346
Operating income (loss)
Utility T&D
(9,574
)
2,085
(5,281
)
15,567
Canada
1,305
(1,764
)
(4,045
)
(650
)
Oil & Gas
(34,969
)
(5,764
)
(60,505
)
(16,783
)
Corporate
(5,819
)
(6,697
)
(21,510
)
(28,795
)
Operating loss
(49,057
)
(12,140
)
(91,341
)
(30,661
)
Non-operating expenses
Interest expense
(5,045
)
(3,543
)
(16,017
)
(13,976
)
Interest income
8
8
31
451
Debt covenant suspension and extinguishment charges
-
-
-
(63
)
Other, net
(298
)
(63
)
(296
)
(63
)
(5,335
)
(3,598
)
(16,282
)
(13,651
)
Loss from continuing operations before income taxes
(54,392
)
(15,738
)
(107,623
)
(44,312
)
Benefit (provision) for income taxes
701
(1,676
)
(964
)
(530
)
Loss from continuing operations
(55,093
)
(14,062
)
(106,659
)
(43,782
)
Income (loss) from discontinued operations net of provision for income taxes
72
(141
)
(1,436
)
(3,977
)
Net loss
$
(55,021
)
$
(14,203
)
$
(108,095
)
$
(47,759
)
Basic loss per share attributable to Company shareholders:
Continuing operations
$
(0.89
)
$
(0.23
)
$
(1.72
)
$
(0.71
)
Discontinued operations
-
-
(0.02
)
(0.06
)
$
(0.89
)
$
(0.23
)
$
(1.74
)
$
(0.77
)
Diluted loss per share attributable to Company shareholders:
Continuing operations
$
(0.89
)
$
(0.23
)
$
(1.72
)
$
(0.71
)
Discontinued operations
-
-
(0.02
)
(0.06
)
$
(0.89
)
$
(0.23
)
$
(1.74
)
$
(0.77
)
Cash Flow Data
Continuing operations
Cash provided by (used in)
Operating activities
$
(28,066
)
$
(3,760
)
$
(49,623
)
$
(11,992
)
Investing activities
301
4,204
2,581
10,843
Financing activities
30,963
(45
)
40,115
(8,615
)
Foreign exchange effects
(232
)
(649
)
823
(29
)
Discontinued operations
(788
)
(589
)
(1,844
)
(7,619
)
Other Data
Weighted average shares outstanding
Basic
62,330
61,683
62,161
61,365
Diluted
62,330
61,683
62,161
61,365
Adjusted EBITDA from continuing operations(1)
$
(43,928
)
$
(6,414
)
$
(70,882
)
$
(2,755
)
Purchases of property, plant and equipment
318
1,266
2,450
3,794
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA from continuing operations (1)
Loss from continuing operations
$
(55,093
)
$
(14,062
)
$
(106,659
)
$
(43,782
)
Interest expense
5,045
3,543
16,017
13,976
Interest income
(8
)
(8
)
(31
)
(451
)
Benefit (provision) for income taxes
701
(1,676
)
(964
)
(530
)
Depreciation and amortization
4,562
5,225
19,162
21,919
Debt covenant suspension and extinguishment charges
-
-
-
63
Stock based compensation
738
858
2,859
4,127
Restructuring and reorganization costs
804
346
1,339
4,933
Accounting and legal fees associated with the restatements
19
18
636
(24
)
Gain on disposal of equipment
(696
)
(585
)
(3,241
)
(3,436
)
Fort McMurray wildfire related costs (income)
-
(73
)
-
450
Adjusted EBITDA from continuing operations(1)
$
(43,928
)
$
(6,414
)
$
(70,882
)
$
(2,755
)
Balance Sheet Data
December 31, 2017
September 30, 2017
June 30, 2017
March 31, 2017
Cash and cash equivalents
$
33,472
$
31,294
$
41,249
$
36,693
Working capital
(83,884
)
56,620
84,033
75,756
Total assets
363,877
400,553
382,108
366,285
Total debt
133,283
100,927
88,179
87,466
Stockholders' equity
31,708
86,295
118,624
118,614
Backlog Data (2)
12 Month Backlog by Reporting Segment
Utility T&D
$
307,122
$
329,531
$
355,480
$
362,749
Canada
51,714
55,127
75,051
77,918
Oil & Gas
118,278
159,213
116,366
87,750
12 Month Backlog
$
477,114
$
543,871
$
546,897
$
528,417
12 Month Backlog exclusive of Tank Services & Mainline Pipeline Construction Services
12 Month Backlog, as reported
$
477,114
$
543,871
$
546,897
$
528,417
Mainline Pipeline Construction Services 12 Month Backlog
20,734
47,123
58,097
45,084
Tank Services 12 Month Backlog
18,258
21,099
26,351
28,813
12 Month Backlog, exclusive of Tank Services and Mainline Pipeline Construction Services
$
438,122
$
475,649
$
462,449
$
454,520
Total By Reporting Segment
Utility T&D
$
387,284
$
459,417
$
540,876
$
605,706
Canada
110,770
122,644
151,336
158,999
Oil & Gas
118,278
159,213
116,366
87,750
Total Backlog
$
616,332
$
741,274
$
808,578
$
852,455
Total Backlog exclusive of Tank Services & Mainline Pipeline Construction Services
Total Backlog, as reported
$
616,332
$
741,274
$
808,578
$
852,455
Mainline Pipeline Construction Services Total Backlog
20,734
47,123
58,097
45,084
Tank Services Total Backlog
18,258
21,099
26,351
28,813
Total Month Backlog, exclusive of Tank Services and Mainline Pipeline Construction Services
$
577,340
$
673,052
$
724,130
$
778,558
(1)
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.
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.
(2)
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
CONTACT Stephen W. Breitigam SVP Investor Relations Willbros 713-403-8172
