EX-99.1 2 v122901_ex99-1.htm
Exhibit 99.1
 
 
 
    CONTACT:   Michael W. Collier
        Vice President, Investor Relations
NEWS RELEASE
      
Willbros USA, Inc.
(713) 403-8016
       
        Connie Dever
        Director, Strategic Planning
        Willbros USA, Inc.
FOR IMMEDIATE RELEASE
       (713) 403-8035
 
WILLBROS ANNOUNCES SECOND QUARTER EARNINGS
OF $0.49 PER DILUTED SHARE FROM CONTINUING OPERATIONS

·  
Company reports consecutive strong quarterly earnings and revenue.
·  
Continuing operations second quarter 2008 net income of $20.1 million compares to net loss of $40.4 million for second quarter 2007.
·  
Second quarter 2008 EBITDA(1) of $48.6 million from continuing operations.
·  
Backlog at June 30, 2008 increased to $1.3 billion, primarily in North America.

HOUSTON, TX— August 6, 2008— Willbros Group, Inc. (NYSE: WG) today reported its results for the second quarter of 2008. On revenue of $467.7 million, net income from continuing operations for the second quarter of 2008 was $20.1 million, or $0.49 per diluted share, as compared to a loss of $40.4 million, or $1.47 per share, in 2007. Including discontinued operations, Willbros reported second quarter 2008 net income of $19.3 million, or $0.47 per diluted share, compared to a loss of $44.2 million, or $1.61 per share from second quarter 2007. Second quarter 2008 revenue from continuing operations of $467.7 million was approximately three times the $156.7 million reported in second quarter 2007. The increase was attributed to high utilization of the Company’s U.S. large diameter pipeline construction capacity, and from the addition of the Downstream services unit, InServ, which was acquired late in 2007.
 
Randy Harl, President and Chief Executive Officer, commented, “Our second quarter 2008 results reflect the leverage our quarterly performance can achieve when we achieve operational excellence. Our Downstream performance, greatly improved over the first quarter, benefited from the seasonality of the refinery maintenance business and the strong market for field services and storage tanks. We saw strong revenue in our Upstream segment, even after the effect of the spring break-up in Canada, and our Engineering segment continues to provide excellent returns executing high value added assignments. Our focus on risk management and improved processes and procedures has contributed to the improvement in execution, as have the hard work and dedication of our employees. We will continue to focus on our plan to grow Willbros, while managing for the best risk-adjusted returns and improvement of our execution skills. We believe the outlook for our business remains very positive and we continue to add backlog, including recently announced significant project work in our pipeline construction operation in Canada.”
 
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Second Quarter 2008 Segment Results From Continuing Operations
 
The Company reported that operating income in second quarter 2008 was $35.9 million compared to a loss of $22.9 million in the second quarter of 2007.
 
The Upstream Oil & Gas segment reported $296.3 million in revenue, compared to $114.0 million for the same period in 2007. Second quarter 2008 operating income was $17.6 million, compared to a loss of $572 thousand in the second quarter of 2007. The increase is attributed to high utilization of U.S. pipeline construction capacity and the lower exposure to project cost escalations due to the high percentage of cost reimbursable contracts.
 
The Downstream Oil & Gas segment reported $112.1 million in revenue and operating income of $11.1 million in the second quarter of 2008. Our downstream business benefited both from additional revenue and excellent execution as seasonal shifts in refinery product slates resulted in both capital and maintenance projects. The outlook for our Downstream segment remains strong despite expected short term impacts from the cost pressures on refinery margins.
 
The Engineering segment reported $59.2 million in revenue, compared to $42.8 million from second quarter 2007. Second quarter 2008 operating income was $7.2 million, compared to $1.7 million in the second quarter of 2007. Engineering continues to sustain strong operating margins, 13.2 percent and 12.2 percent in the first two quarters of 2008, and is expected to operate at this level throughout 2008.
 
EBITDA(1) from second quarter 2008, driven by strong operating performance, was $48.6 million, an improvement of $83.0 million over second quarter 2007.
 
General and Administrative costs were $28.4 million, or 6.1 percent of revenue, as compared to $13.8 million, or 8.8 percent of revenue in the second quarter of 2007.
 
Second Quarter 2008 Results From Discontinued Operations
 
The Company reported a net loss from discontinued operations of $736 thousand, or $0.02 per share, compared to a loss of $3.9 million or $0.14 per share in the second quarter of 2007.
 
Backlog(2)
 
At June 30, 2008, Willbros reported backlog(2) of approximately $1.3 billion compared to $1.2 billion at March 31, 2008. Management remains highly confident that backlog will grow year over year in the robust environment for its services. Backlog has increased from $1.0 billion at June 30, 2007. At June 30, 2008, approximately 79 percent of contract backlog was cost reimbursable.
 
CONFERENCE CALL
 
In conjunction with the release, Willbros has scheduled a conference call, which will be broadcast live over the Internet on Thursday, August 7, 2008 at 9:00 a.m. Eastern Time (8:00 a.m. Central).
 
What:    Willbros Group, Inc. Second Quarter 2008 Earnings Conference Call
       
  When:    Thursday, August 7, 2008 - 9:00 a.m. Eastern Time
       
Where:   Live via phone by dialing 800-289-0508 or 913-981-5550, passcode 9843760, and asking for the Willbros call at least 10 minutes prior to the start time
 
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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 22, 2008 and may be accessed by calling 888-203-1112 or 719-457-0820 and using the passcode 9843760. 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, and refining and petrochemical industries, providing engineering, construction, turnaround and maintenance 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 those discussed above and such things as the potential for additional investigations; the possible losses arising from the discontinuation of operations and the sale of the Nigeria assets; 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 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

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WILLBROS GROUP, INC.
(In Thousands, Except Per Share Amounts)
 
   
Three Months Ended
  
Six Months Ended
  
   
June 30,
  
June 30,
  
   
2008
  
 2007
  
 2008
 
 2007
  
Statement of Operations Data
                     
Contract revenue
                     
 Upstream O&G
  
$
296,349
  
$
113,965
  
$
640,772
  
$
285,550
  
 Downstream O&G
    
112,136
    
-
    
192,746
    
-
  
 Engineering
    
59,232
    
42,778
    
125,833
    
77,902
  
     
467,717
    
156,743
    
959,351
    
363,452
  
Operating expenses
                          
 Upstream O&G
    
278,751
    
114,537
    
600,008
    
292,622
  
 Downstream O&G
    
101,034
    
-
    
178,697
    
-
  
 Engineering
    
51,990
    
41,064
    
109,826
    
71,692
  
 Government fines
    
-
    
24,000
    
-
    
24,000
  
     
431,775
    
179,601
    
888,531
    
388,314
  
Operating income (loss)
                          
 Upstream O&G
    
17,598
    
(572
)
  
40,764
    
(7,072
)
 Downstream O&G
    
11,102
    
-
    
14,049
    
-
  
 Engineering
    
7,242
    
1,714
    
16,007
    
6,210
  
 Government fines
    
-
    
(24,000
)
  
-
    
(24,000
)
Operating income (loss)
    
35,942
    
(22,858
)
  
70,820
    
(24,862
)
                           
Other income (expense):
                          
 Interest - net
    
(1,865
)
  
(187
)
  
(3,394
)
  
(1,077
)
 Other - net
    
573
    
(502
)
  
146
    
(692
)
 Loss on early extinguishment of debt
    
-
    
(15,375
)
  
-
    
(15,375
)
     
(1,292
)
  
(16,064
)
  
(3,248
)
  
(17,144
)
Income (loss) before income taxes
    
34,650
    
(38,922
)
  
67,572
    
(42,006
)
Provision for income taxes
    
14,576
    
1,457
    
28,393
    
1,712
  
Income (loss) from continuing operations
    
20,074
    
(40,379
)
  
39,179
    
(43,718
)
Income (loss) from discontinued operations
    
(736
)
  
(3,860
)
  
1,823
    
(12,368
)
Net income (loss)
  
$
19,338
  
$
(44,239
)
$
41,002
  
$
(56,086
)
                           
Basic income (loss) per share
                          
Continuing operations
  
$
0.52
  
$
(1.47
)
$
1.03
  
$
(1.65
)
Discontinued operations
    
(0.02
)
  
(0.14
)
  
0.05
    
(0.47
)
   
$
0.50
  
$
(1.61
)
$
1.08
  
$
(2.12
)
Diluted income (loss) per share
                          
Continuing operations
  
$
0.49
  
$
(1.47
)
$
0.95
  
$
(1.65
)
Discontinued operations
    
(0.02
)
  
(0.14
)
  
0.04
    
(0.47
)
   
$
0.47
  
$
(1.61
)
$
0.99
  
$
(2.12
)
Cash Flow Data
                          
Continuing operations:
                          
Cash provided by (used in):
                          
Operating activities
  
$
25,807
  
$
13,346
  
$
60,189
  
$
6,006
  
Investing activities
    
(7,002
)
  
(25,911
)
  
(9,587
)
  
102,877
  
Financing activities
    
(18,864
)
  
(17,907
)
  
(26,298
)
  
(22,092
)
Foreign exchange effects
    
804
    
(636
)
  
(573
)
  
(453
)
Discontinued operations
    
2,855
    
(6,569
)
  
2,592
    
(16,219
)
                           
Other Data (Continuing Operations)
                          
Weighted average shares outstanding:
                          
Basic
    
38,378
    
27,516
    
38,198
    
26,505
  
Diluted
    
43,874
    
27,516
    
43,972
    
26,505
  
EBITDA (1)
  
$
48,598
  
$
(34,425
)
$
93,753
  
$
(33,163
)
Capital expenditures
    
13,414
    
8,334
    
20,594
    
10,836
  

Reconciliation of Non-GAAP Financial Measure
                   
                   
EBITDA (1)
                   
Net loss, continuing operations
  
$
20,074
  
$
(40,379
)
$
39,179
  
$
(43,718
)
Interest - net
    
1,865
    
187
    
3,394
    
1,077
  
Income taxes
    
14,576
    
1,457
    
28,393
    
1,712
  
Depreciation and amortization
    
12,083
    
4,310
    
22,787
    
7,766
  
EBITDA
  
$
48,598
  
$
(34,425
)
$
93,753
  
$
(33,163
)

4
 
Balance Sheet Data
  
6/30/2008
 
3/31/2008
 
12/31/2007
  
Cash and cash equivalents
  
$
119,209
  
$
115,609
  
$
92,886
  
Working capital
    
237,960
    
219,090
    
201,348
  
Total assets
    
842,447
    
871,305
    
779,413
  
Total debt
    
159,700
    
166,090
    
152,346
  
Stockholders' equity
    
447,057
    
423,460
    
396,101
  
                     
Backlog Data (2)
                    
By Reporting Segment:
                    
Upstream O&G
  
$
975,443
  
$
808,027
  
$
941,301
  
Downstream O&G
    
212,378
    
233,920
    
199,646
  
Engineering
    
112,214
    
119,548
    
164,494
  
   
$
1,300,035
  
$
1,161,495
  
$
1,305,441
  
By Geographic Area:
                    
North America
  
$
1,221,019
  
$
1,079,722
  
$
1,229,878
  
Middle East
    
79,016
    
81,773
    
75,563
  
   
$
1,300,035
  
$
1,161,495
  
$
1,305,441
  
 
(1)   EBITDA is earnings before net interest, income taxes and depreciation and amortization. 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.
     
(2)   Backlog is anticipated contract revenue from projects for which award is either in hand or reasonably assured.
 
 
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